With energy bills rising again for millions of households and forecasts pointing to a much bigger increase in January 2027, 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 rose by 4% on 1 October2026 for millions of households, when the new energy price cap came into force, driven by higher wholesale gas prices due to the conflict in the Middle East.
The increase saw 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 energy price cap could rise to around £2,200.
The Autumn Budget included a £100 household energy payment this winter for around 20 million households in council tax bands A-D in England. The zero VAT rate on domestic electricity bills has also been extended until 30 July 2027.
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.
The government plans to scrap gas standing charges in 2027 or as soon as possible afterwards, moving the costs into gas unit rates. Lower gas users could save, but higher users could pay more.
No. Energy prices rose again in October 2026 for millions of households when the energy price cap, which is set by Ofgem, increased by 4% for the period 1 October to 31 December 2026.
For a household with typical usage, paying by Direct Debit, the energy price cap rose from £1,663 a year 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 then rising further to £1,723 on 1 October.
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 from 1 October 2026. In the Autumn Budget, the Chancellor extended this until July 2027. Gas will remain subject to 5% VAT.
Ofgem has already built the existing VAT cut into the October cap figures. The Chancellor also announced a £100 household energy payment this winter for around 20 million households in council tax bands A-D in England. Funding will also go to the Scottish, Welsh and Northern Ireland governments to provide support, with arrangements to be decided by each government.
The government also announced plans to scrap gas standing charges in 2027 or as soon as possible afterwards. The costs will move into gas unit rates instead, so lower gas users could save but higher users could pay more. Electricity standing charges will remain for now. Read more below under Standing charge changes.
2026 energy price cap predictions
Here are the latest energy price cap predictions. These are predictions, rather than confirmed prices. Ofgem will announce January’s cap on 25 November 2026.
E.ON’s November energy price cap forecast is for the price cap to increase to £2,183 in January 2027, then increase again in April 2027 to £2,358..
EDF’s gas and electricity prices forecast on 28 October 2026 is for the price cap in the UK to increase to £2,189 in January 2027, then jump further to £2,308 in April 2027..
British Gas’s forecast on 2 November 2026 is for the price cap in the UK to increase in January 2027 to £2,250, and £2,345 in April 2027.
Cornwall Insight’s forecast on 30 September expected the energy price cap to rise by 16% in January 2027, compared to October, reaching £1,999 a year for a typical dual-fuel household. This would be an increase of £276 and the largest rise since January 2023.
The £100 household energy payment announced in the Budget is separate from the price cap: it will be paid into bank accounts rather than deducted from energy rates.
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.
The lowest fixed energy deals currently available are higher than the October price cap, but lower than the forecasts for January 2027. The price cap is forecast to rise again in April, 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
Previous cap: 1 Jul – 30 Sep 2026
£1,663
Current: 1 Oct – 31 Dec 2026
Up 4% to £1,723
Current energy price cap rates in November 2026
If you’re one of the 22 million households in Great Britain on a standard variable tariff, here’s how the new price cap will change how much you pay:
Type
Previous price cap rates from 1 July to 30 Sep 2026
Current 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 22 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 switch your energy tariff now, you’ll likely move onto a deal that’s higher than the current price cap but 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 October’s rise and the prospect of a much bigger increase in January. We advise people to shop around and compare tariffs to ensure you’re on the best deal for you.”
The government announced on 28 October 2026 that it plans to remove gas standing charges for around 23 million homes. Ofgem will be asked to deliver the change in 2027 or as soon as possible afterwards. Electricity standing charges will remain for now.
Standing charges are daily fees you pay even when you use no energy. However, removing the gas standing charge will not remove the underlying costs: these will be added to gas unit rates instead.
The Treasury estimates that 60% of households with gas accounts could save an average of £45 a year. Lower gas users are expected to benefit, but households using more gas could pay more.
It has not yet been confirmed how the change will apply to different tariffs, including fixed deals, or payment methods such as prepayment.
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 Autumn Budget included a £100 household energy payment this winter for around 20 million households in council tax bands A-D in England. The Chancellor said it will be paid directly into bank accounts. Funding will also go to the Scottish, Welsh and Northern Ireland governments to provide support, with arrangements to be decided by each government.
The government has also announced that VAT will be removed from domestic electricity bills from 1 October 2026 until 30 June 2027. 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 from 22°C to 21°C could save around £120 a year in Great Britain, according to Energy Saving Trust, provided you still feel comfortably warm. You can also cut your heating bills by installing certain heating controls. And consider getting a smart thermostat, which allows you to control your heating from your smartphone or tablet.
