What’s happening to the price cap in October
Ofgem has confirmed the next price cap rise, and it lands on 1 October. The typical dual fuel household paying by direct debit moves from £1,663 a year to around £1,723, a rise of about £60 a year, which Ofgem rounds to 4%.
Most of that comes from gas. Gas costs are pushing up bills by around 8%, while electricity only households will barely notice the change. If you don’t use gas, this price cap rise mostly passes you by.
Here’s the bit that trips people up. The government has also removed VAT from electricity bills, running from 1 October 2026 to 31 March 2027. Sounds like a straight discount. It isn’t, not once October’s rise is added back on top.
Why is my energy bill still rising if VAT was cut?
Because the VAT cut and the price cap rise are two separate moves that happen to land on the same day, and the rise is bigger. Ofgem sets the cap based on wholesale costs, network charges and supplier costs, then VAT is applied afterwards. Cutting VAT on electricity shaves a small amount off; the underlying cap going up by 4% adds more back than the VAT cut takes away.
Martin Lewis at MoneySavingExpert flagged this plainly: the cap is still rising roughly 3.6% to 4% from 1 October, even after the VAT cut is factored in. It’s a fair complaint. A tax cut that gets swallowed by a price rise doesn’t feel like much of a win at the kitchen table.
How much will the October price cap rise actually cost you
For the average dual fuel household on direct debit, the price cap rise works out at roughly £60 a year, or about £5 a month, on top of what you’re already paying. Actual bills vary a lot by usage, so treat this as a rough guide rather than your own number.
Key takeaways
- The October price cap rise adds around £60 a year to the average dual fuel bill, taking it to about £1,723.
- Gas is doing most of the damage, up roughly 8%, while electricity only bills barely move.
- The VAT cut on electricity, running to 31 March 2027, softens the blow slightly but doesn’t cancel it out.
- Around 11 million households on fixed deals, about 35% of the market, are shielded from this particular rise.
- Ofgem says fixed tariffs are available for £100 or more below the new cap, an estimated saving of around £173 a year for some households.
Who this price cap rise affects, and who it doesn’t
If you’re already on a fixed tariff, this one mostly isn’t your problem. Around 11 million households, roughly 35% of the market, are locked into fixed rates and won’t feel October’s change until their deal ends.
Everyone else, sitting on a variable or default tariff, rides the price cap rise automatically. No letter to ignore, no form to fill in. It just happens to your direct debit.
Ofgem reckons switching is picking up too. July alone saw around 362,000 supplier switches, a record for the year. Plenty of people, it seems, would rather do ten minutes of admin than sit still and absorb it.
Worth remembering this isn’t the only move the cap has made this year. It rose around 13% back in July, then this latest change takes it up again from October. Two rises in one year, on top of each other, is exactly the kind of drip that’s easy to miss if you’re not watching your direct debit line by line.
What can you actually do before the price cap rise hits?
Check whether a fixed deal beats the new cap. Ofgem’s own figures suggest fixed tariffs are sitting £100 or more below the October cap for some households, an estimated saving of around £173 a year depending on usage. That’s not guaranteed for everyone, but it’s worth ten minutes of checking before the 1 October change lands.
If you’re mid contract on a fix already, there’s usually nothing to do. If you’re on a standard variable tariff, this is exactly the moment suppliers are counting on you doing nothing. Roo would tell you it takes about as long as boiling a kettle to check.
Read your meter on 30 September if you can, especially if you’re switching or your supplier is changing its rates. It settles any dispute about which price applied to which day.
Frequently asked questions about the October price cap rise
- When does the October price cap rise take effect?
- From 1 October 2026, running through to 31 December 2026, when Ofgem next reviews the cap.
- Does the price cap rise affect people on fixed tariffs?
- No. Fixed deals are unaffected until they end. Around 11 million UK households, about 35% of the market, are on fixed tariffs.
- Why did my bill go up if VAT was cut on electricity?
- The VAT cut reduces one part of the bill, but the underlying price cap rise adds more back on top, so the net effect for most households is still an increase.
- Is it worth switching before the price cap rise lands?
- It can be. Ofgem says some fixed tariffs currently sit £100 or more below the new cap, an estimated saving of around £173 a year for the households they apply to. Compare current deals against the new cap rather than the old one.
- Will gas or electricity go up more under this price cap rise?
- Gas is the bigger driver, rising around 8%. Electricity only bills will see a much smaller change, under 1%.
None of this is a reason to panic. It’s a reason to spend a few minutes checking your options before 1 October, rather than after. For more on how the cap works day to day, our guide to the energy price cap breaks down what it actually covers. And if a fixed deal does look better than sitting through this price cap rise, our guide to switching energy supplier walks through the process step by step.
You can read Ofgem’s own announcement on the October 2026 price cap rise for the full breakdown of what’s changed.
