Households across Great Britain will face higher energy costs from October, after Ofgem confirmed that the energy price cap will rise by 4% for the final quarter of 2026.
From 1 October to 31 December 2026, the cap for a typical household paying by Direct Debit will increase from £1,663 to £1,723 per year. This represents an increase of around £60 over a year, equivalent to approximately £5 a month if the October rate were maintained for 12 months.
The change will affect households on standard variable and other default tariffs that are covered by the price cap. Customers on fixed tariffs will generally be unaffected by this particular change.
What is the energy price cap?
The energy price cap is set by Ofgem, the UK’s energy regulator. It limits the rates suppliers can charge customers on default tariffs for each unit of gas and electricity, as well as the daily standing charges.
Importantly, the cap is not a limit on the total amount a household can spend on energy. Your actual bill depends on how much energy you use.
The headline figure of £1,723 is based on Ofgem’s typical domestic consumption assumptions. Households that use more energy will pay more, while those using less will pay less.
What are the new energy rates?
From 1 October, the electricity unit rate for a typical Direct Debit customer will increase slightly from 26.11p per kWh to 26.32p per kWh.
The electricity standing charge will fall from 57.19p to 54.83p per day.
Gas customers will see a more noticeable increase in the unit rate, rising from 7.33p per kWh to 7.97p per kWh. The gas standing charge will also increase from 29.04p to 29.68p per day.
For many households, the increase in gas costs will therefore be an important factor behind the higher overall bill.
Why is the price cap increasing?
Ofgem reviews the price cap every three months. The level is influenced by a range of costs faced by energy suppliers, including wholesale energy prices, network costs, operating costs and other industry charges.
Changes in wholesale energy costs can therefore feed through into the price cap when Ofgem carries out its quarterly review.
The October increase follows a much larger rise earlier in 2026. The cap increased by 13% in July, taking the typical annual cost from £1,641 during the April to June period to £1,663 for July to September.
The latest 4% increase is considerably smaller, but it will still add further pressure to household budgets as winter approaches.
What does this mean for households?
The timing of the increase will be particularly important for households that rely on gas heating.
October marks the beginning of the colder months, when energy consumption typically increases as households heat their homes for longer. A higher unit rate combined with increased winter usage can therefore result in bills rising by more than the £60 headline figure suggests.
The £1,723 figure should consequently be viewed as a useful benchmark rather than a prediction of what every household will pay.
Around 35% of households are currently on fixed tariffs, according to Ofgem, and these households will not be directly affected by the October price cap increase while their fixed deals remain in place.
How can households prepare?
With the new rates coming into effect at the start of October, households may want to review their current energy arrangements and consumption.
Simple steps can include:
- Checking whether your current tariff is fixed or subject to the price cap.
- Reviewing your latest energy bills to understand how much gas and electricity you use.
- Comparing available tariffs before deciding whether to switch.
- Checking your meter readings around the changeover date.
- Looking for available support if higher energy costs are likely to cause financial difficulty.
- Taking practical steps to reduce heat loss, such as improving insulation and draught-proofing where possible.
It is also worth remembering that reducing consumption can have a direct impact on your bill because the price cap applies to the rates charged for energy usage and standing charges.
What happens next?
The new price cap will apply from 1 October until 31 December 2026. Ofgem will subsequently review the cap again for the January to March 2027 period.
For households already facing higher living costs, the October increase is another reason to keep an eye on energy usage and available tariffs as winter approaches.
The immediate increase is relatively modest compared with the 13% rise introduced in July, but the combination of higher energy rates and increased winter consumption could still make a noticeable difference to household budgets.
For consumers, the key message is straightforward: check your current tariff, understand how much energy you use and make sure you are aware of any support or alternative tariffs available to you before the new rates take effect.