From 1 October to 31 December 2026, the price cap for a typical household paying by Direct Debit rises 4%, from £1,663 to £1,723 a year. Gas costs more. Electricity stays broadly the same, because VAT is removed from household electricity from 1 October.

The rest of this guide covers the new rates, who they apply to, and what to check on your own account. All figures are Ofgem's GB averages as of 25 September 2026. Your exact rates depend on your region, meter and payment method.

What are the new price cap rates?

These are the GB average rates for Direct Debit customers on a standard variable (default) tariff. Electricity has no VAT from 1 October 2026. Gas includes 5% VAT.

Electricity, 1 October to 31 December 2026

  • Unit rate: 26.32p per kWh (was 26.11p)
  • Standing charge: 54.83p per day (was 57.19p)

Gas, 1 October to 31 December 2026

  • Unit rate: 7.97p per kWh (was 7.33p)
  • Standing charge: 29.68p per day (was 29.04p)

The "was" figures are the July to September 2026 rates, which included 5% VAT on both fuels. So the electricity unit rate looks almost unchanged, but that is only because VAT has come off. Before VAT, it went up.

How much will a typical bill change?

Ofgem's typical dual fuel bill for October to December 2026, including VAT, is:

  • Direct Debit: £1,723 a year (was £1,663)
  • Standard credit (paying on receipt of a bill): £1,861 a year (was £1,796)
  • Prepayment: £1,678 a year (was £1,620)

Each is a 4% rise. For Direct Debit, Ofgem puts the increase at £60 a year, or about £5 a month. It says gas bills rise by 8%, while electricity bills stay broadly stable.

These "typical" bills are based on Ofgem's typical consumption values: 2,500 kWh of electricity and 9,500 kWh of gas a year. If you use more, you pay more. If you use less, you pay less. The cap does not limit your total bill.

Why is the cap going up?

Ofgem says the increase is caused by higher wholesale gas prices, linked to the ongoing conflict in the Middle East. It reports that wholesale gas prices rose 11% over the three months it looked at.

The government's removal of VAT from household electricity offsets part of this. Ofgem says this reduces the impact by around £45 a year for a typical household.

What is the VAT change on electricity?

From 1 October 2026 to 31 March 2027, household electricity in Great Britain is charged at 0% VAT instead of 5%. The government announced it on 21 July 2026.

The main points:

  • It applies to electricity only. Gas stays at 5% VAT.
  • It applies in England, Scotland and Wales. In Northern Ireland, electricity stays at 5%.
  • It applies whether you are on a fixed or variable tariff, and on prepayment meters.
  • You do not need to do anything. Your supplier removes the VAT.
  • The government puts the average saving at £45 a year per household.

If your bill period runs across 1 October, HMRC allows suppliers to split the VAT by when the energy was used, and it recommends using meter readings. That makes a meter reading on or around 1 October worth taking.

Does the price cap apply to me?

The cap applies to standard variable tariffs, also called default tariffs, in England, Scotland and Wales. It covers Direct Debit, standard credit, prepayment and Economy 7 customers.

It does not apply to:

  • Fixed tariffs. Your rates stay as agreed until the fixed term ends. Ofgem says around 11 million households are on fixed deals. The VAT removal still applies to your electricity.
  • Business energy contracts.
  • Heat networks and heating oil.
  • Northern Ireland, which has separate arrangements.

If your fixed deal ends soon, check which tariff your supplier says you will move onto when it ends, and compare it with the capped rates above.

Why do rates differ by region and payment method?

The price cap sets a maximum for each unit rate and standing charge, and those maximums vary by region, meter type and payment method. The figures above are GB averages. Your own bill or supplier account shows your exact rates.

Payment method makes a real difference. Using Ofgem's typical bills above, standard credit costs £138 a year more than Direct Debit for the same energy. If you can pay by Direct Debit, it is worth checking whether switching payment method would lower your costs.

What does it mean for your own bill?

You can work out your own annual cost for each fuel with one sum:

  • Annual cost = (your annual kWh × unit rate) + (365 × daily standing charge)

Your annual kWh is usually shown on your bill or in your supplier's app. Use your actual rates, not the averages. Our energy bill estimator does this for you and shows low, typical and high ranges.

If you pay by Direct Debit, your supplier may review your payment after the cap changes. A rise in your payment does not necessarily mean your usage has gone up. See how to check your Direct Debit and credit balance.

Is there any help if the new prices are hard to afford?

Ofgem urges anyone struggling to contact their supplier as soon as possible, to agree an affordable repayment plan and ask what support is available.

The government says around 6 million households will get £150 off their electricity bill through the Warm Home Discount. It is worth checking whether you qualify.

When will the cap change next?

Ofgem sets the cap every three months. The current level runs from 1 October to 31 December 2026, and the next period starts on 1 January 2027. The VAT removal on electricity is due to end on 31 March 2027, when the rate returns to 5%.

For more on how the cap is built, see our energy price cap guide. For the difference between fixed and variable deals, see fixed or variable tariff: how to compare.

This is general information, not legal or financial advice.

What to do next

  • Take gas and electricity meter readings on or close to 1 October 2026, and give them to your supplier. Keep a dated photo.
  • Check your bill or app for your own unit rates and standing charges, not the GB averages.
  • Check whether you are on a fixed or variable tariff, and when any fixed deal ends.
  • If you pay on receipt of a bill, compare what Direct Debit would cost.
  • Look at your electricity bills from October to confirm VAT shows as 0%.
  • Put your usage into the estimator to see a realistic annual range.
  • If you are struggling to pay, contact your supplier now and ask about a payment plan and the Warm Home Discount.

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