With energy bills set to hit a three year high for millions of households from October, we explain what’s happening, whether prices are likely to come down, and how you could save money on your energy bills now.
Energy bills will rise by 4% in October, when the new energy price cap comes into force, driven by higher wholesale gas prices due to the conflict in the Middle East.
The increase will see the energy price cap rise to £1,723 for a typical household’s gas and electricity use, up from £1,663 for the July to September period.
Energy prices could rise sharply again in January 2027, with current forecasts suggesting the price cap could increase by up to around 25% compared with October’s level.
If you’re on the energy price cap, you may be able to save money on your energy bills by switching to a fixed deal, depending on the tariff you choose and how much energy you use.
Other tariffs are also available, such as discounted price cap tariffs, which typically offer a fixed discount on the price cap for 12 months. So compare your energy deal options today.
Energy prices are set to rise again in October 2026 for households on the energy price cap. This is because the price cap, which is set by Ofgem, will increase by 4% for the period 1 October to 31 December 2026.
For a household with typical usage, paying by Direct Debit, it’s currently set at £1,663 a year but in October this will increase to £1,723.
This figure may look lower than expected – this is because Ofgem has lowered the amount of energy it deems a typical household to use. But remember, the cap is only a limit on standing charges and gas and electricity unit rates, not a cap on how much you’ll pay.
Energy bills latest news: How the Middle East conflict may impact bills
Wholesale energy prices have increased sharply since the start of the conflict in the Middle East.
British households on the price cap saw it increase from £1,477 a year in April, to £1,663 from 1 July, and it will rise further to £1,723 in October.
And there are growing concerns that bills could rise further in 2027. Bank of England governor Andrew Bailey has warned that energy prices “could be higher still” next year if the conflict continues.
Prime Minister Andy Burnham has announced that help will be given to soften the blow, with electricity bills for households in Great Britain not attracting VAT for 6 months from 1 October 2026. Gas will remain subject to 5% VAT. Ofgem has already built this into the October cap figures.
EDF’s gas and electricity prices forecast on 22 September 2026 is for the price cap in the UK to increase to £2,098 in January 2027.
British Gas’s forecast on 21 September 2026 is for the price cap in the UK to increase in January 2027 to £2,135.
Bloomberg Economics’ forecast is for the energy price cap to rise by around 25% in January 2027, to £2,150.
The outlook has become more concerning as wholesale energy prices have risen. MoneySavingExpert’s Martin Lewis has warned that current wholesale prices could feed through to a significant increase in the January price cap, although exactly what happens will depend heavily on how the conflict and wholesale prices develop.
In late February 2026, before the Middle East conflict started, the energy price cap was predicted to remain around April’s price cap level of £1,477 for the rest of 2026.
How accurate are these energy price cap predictions likely to be?
The further ahead the forecast, the less likely it is to be accurate.
The volatility of global events currently playing out makes it even harder to make an accurate energy price cap prediction. In fact, for a period in March 2026, British Gas stopped making predictions on what may happen with upcoming price caps due to wholesale energy prices changing every day.
Should I fix my energy deal?
If you’re on the energy price cap and fix your energy deal, you could save money over the next year, depending on the tariff you choose, how long it’s fixed for, and how much energy you use.
There are fixed deals currently available that are lower than October’s price cap, and substantially lower than current forecasts for January 2027, which suggest the price cap could rise by up to around 25%, although these forecasts can change quickly.
Although the outlook that far ahead is highly uncertain and will depend partly on what happens to wholesale energy prices and the conflict in the Middle East.
If you fix your energy deal, the rates you pay won’t increase for the length of the fix. But if energy prices fall, you could end up paying more than you would on a variable tariff.
Bear in mind that some of the most competitive fixed deals currently available are longer-term fixes. While these may look attractive compared with current forecasts for January’s price cap, they could look much less competitive later if wholesale energy prices fall.
So if you’re considering a fixed tariff, remember to check the length of the deal and any exit fees for leaving the deal early.
Alternatives to fixing
There are also energy deals available that track under the energy price cap or that follow the energy price cap’s unit rates but have lower standing charges.
This table illustrates how much energy prices have changed in recent months:
Time period
Energy price cap amount
Current cap: 1 Jul – 30 Sep 2026
£1,663
Future: 1 Oct – 31 Dec 2026
Up 4% to £1,723
Current energy price cap rates in September 2026
If you’re one of the 22 million households in the UK on a standard variable tariff, here’s how the new price cap will change how much you pay:
Type
Current price cap rates from 1 July to 30 Sep 2026
Future price cap rates from 1 Oct to 31 Dec 2026
Gas
Unit rate: avg. 7.33p per kWh Standing charge: 29.04p per day
Unit rate: avg. 7.97p per kWh Standing charge: 29.68p per day
Electricity
Unit rate: avg. 26.11p per kWh Standing charge: 57.19p per day
Unit rate: avg. 26.32p per kWh Standing charge: 54.83p per day
Am I on the energy price cap?
If you’re wondering if this affects you, the Ofgem price cap applies to around 21 million households on variable energy tariffs – so it sets what two thirds of homes in England and Wales will pay. You’ll know you’re affected if you are on a tariff called something like standard, flexible or variable rate rather than fixed.
How the energy price cap works
The energy price cap limits the unit rates and standing charges energy suppliers can charge for their standard tariffs.
However, the energy price cap figure is based on the usage of a ‘typical’ household using gas and electricity and paying by Direct Debit.
It’s not the maximum you’ll pay. If you use more energy than a typical household, you’ll pay more than the price cap and if you use less, your bill will be lower.
If you fix your energy tariff now, there are currently fixed deals available that are lower than the October price cap, and significantly lower than the forecast for the January 2027 price cap, although forecasts can change.
So you could potentially make savings compared with staying on a price-capped tariff, depending on the tariff you choose and how much energy you use.
Whether switching to a fixed tariff is the best option for you will depend on your risk appetite and how good the deal is.
It’s also a good time to check for the best deal if you’re moving house, if your current supplier has poor customer service or you want a specialist tariff such as an EV tariff.
When comparing deals, check how long the fixed deal lasts for and whether you’ll need to pay an exit fee if you leave early.
Paula Higgins, Chief Executive of the HomeOwners Alliance, says: “People are rightly very concerned over how much the energy price cap will rise by on 1 October. We advise people to shop around and compare tariffs to ensure you’re on the best deal for you.”
Many households believe standing charges are unfair as they don’t have any control over how much they’re charged.
However, this move by Ofgem may not lead to big savings because these costs will be added to the unit cost of energy instead.
Also, some charities say the plans are complex and could leave some vulnerable customers to make the wrong choice.
Can I get help with energy bills?
Yes. Around six million households are eligible for the £150 Warm Home Discount this winter, and some energy suppliers also offer hardship funds.
The government has also announced that VAT will be removed from domestic electricity bills from 1 October 2026 to 31 March 2027, saving households around £45 a year on average. VAT will continue to apply to gas bills.
Pensioners may also qualify for the Winter Fuel Payment. In England and Wales, this includes pensioners with an annual income of £35,000 or below.
Here are the historic price changes to Ofgem’s energy price cap, which shows how energy bills have increased and decreased in recent years.
Price cap period
Ofgem energy price cap
Price cap change vs previous period
January – March 2026
£1,758
+0.2%
October-December 2025
£1,755
+2%
July – September 2025
£1,720
-7%
April – June 2025
£1,849
+6.4%
January – March 2025
£1,738
+1%
October – December 2024
£1,717
+10%
July – September 2024
£1,568
-7%
April – June 2024
£1,690
-12%
January – March 2024
£1,928
+5%
October – December 2023
£1,834
-7%
July – September 2023
£1,976
-37%
April – June 2023
£3,116*
-23%
January – March 2023
£4,059*
20%
October – December 2022
£3,371*
80%
Summer 2022
£1,877
54%
Winter 2021/22
£1,216
12%
Summer 2021
£1,084
9%
Source: Ofgem data. *This was replaced by the £2,500 Energy Price Guarantee
How to keep energy bills low
Once you’ve shopped around for the best energy deal, the other way to save on energy bills is to use less. You can do this by:
Insulating your home: There are all sorts of ways you can make your home more energy efficient from relatively inexpensive and very effective options like installing loft insulation, to more expensive undertakings like fitting double glazing or replacing your boiler. See if you can get a grant for a boiler upgrade and whether you can access any other help with our guide on energy grants. For more information see also our guide on how to make your home more energy efficient.
Draught-proofing your home: Professional draught proofing of windows, doors and blocking cracks in floors and skirting boards can cost around £250, but can save around £45 a year on energy bills. DIY draught proofing can be much cheaper. For this and more affordable tips, see our guide on How to keep your house warm for less.
Turn down your thermostat: Turning it down by 1 degree could cut your heating bills by up to 10%. You can also cut your heating bills by installing certain heating controls. If you don’t already have a room thermostat, installing one could save up to £70 a year. And consider getting a smart thermostat, which allows you to control your heating from your smartphone or tablet.
