What is the January price cap forecast?
Analysts at Cornwall Insight reckon the January price cap could rise by around 9%, taking the typical dual fuel bill from £1,723 a year to roughly £1,872. That’s an extra £149 a year for a household on typical usage, paying by direct debit.
A forecast, not a fact, so let’s be clear about the difference. Ofgem doesn’t confirm the real January price cap until late November. Wholesale gas prices can still move between now and then, in either direction, and suppliers would love nothing more than for you to stop checking.
Even so, it’s the first solid signal on where bills are heading after October’s confirmed 4% rise, and it isn’t a small one.
Careful comparing this with last winter’s bill
This is the part that trips people up, and it’s worth a minute before you look at any price cap number this year.
On 1 July 2026 Ofgem changed what it counts as a typical household, because households are using less energy than they were: around 7% less electricity and 17% less gas than at the last review. The typical use assumptions are now 2,500 kWh of electricity and 9,500 kWh of gas a year, down from the older figures.
That means every headline cap figure from July 2026 onwards is calculated on a smaller basket of energy than the ones you saw in previous years. Ofgem spells out the effect itself: October’s £1,723 cap would have been quoted as £1,935 under the old 2023 consumption values. Same prices, same cap, different yardstick.
So if the January price cap forecast of £1,872 looks lower than a figure you remember from a couple of winters ago, that gap is partly the yardstick rather than the price. Compare unit rates and standing charges if you want a like for like read, or simply compare against October’s £1,723, which is measured the same way.
Why is the January price cap rising again?
The short answer is gas. Roughly half of a typical dual fuel bill is gas, and wholesale gas prices have been climbing through 2026.
The dominant driver sits a long way from any UK gas terminal. Disruption to shipping through the Strait of Hormuz, the route around a fifth of the world’s liquefied natural gas passes through, has tightened the global market, and US and Iran tensions have kept a risk premium attached to it. On top of that, a price gap between Asian and European buyers has pulled LNG cargoes eastwards, and restocking European gas storage ahead of winter has been harder and more expensive than usual. We covered the detail when wholesale gas prices hit a four year high earlier this month.
None of that is under your control, and it’s not really under Ofgem’s either. The price cap doesn’t set supplier profit margins so much as track what it actually costs them to buy the energy you use, plus network and policy costs. When wholesale prices rise, the January price cap follows suit.
There’s one bit of good news, with conditions attached. The government has suspended VAT on domestic electricity, taking it from 5% to zero from 1 October 2026 to 31 March 2027. That covers the whole of the January price cap period, not just October’s. Two caveats worth knowing: it applies in Great Britain only, with Northern Ireland staying at 5%, and it’s electricity only. Gas stays at 5% across the UK.
This year’s cap has swung more than most. It fell 6.7% in April, jumped 13% in July, then rose a further 4% in October. A 9% January price cap rise on top of that would make it four different moves in four quarters, which says more about how jumpy wholesale gas prices have been through 2026 than about any single cause.
January price cap at a glance
Here’s the January price cap forecast next to the confirmed October figures, checked September 2026.
| October 2026 (confirmed) | January 2027 (forecast) | |
|---|---|---|
| Typical annual dual fuel bill | £1,723 | around £1,872 |
| Change on the previous cap | +4% (from £1,663) | around +9% (+£149) |
| Confirmed by Ofgem | 26 August 2026 | expected late November 2026 |
| Consumption basis | 2,500 kWh electricity, 9,500 kWh gas (Ofgem TDCV from 1 July 2026) | |
Both figures assume a household on a standard variable tariff paying by direct debit. The cap limits unit rates and standing charges, not your total bill, so if you use more than the typical amounts you’ll pay more than the headline figure.
Should you fix before the January price cap rises?
Honestly, it depends. The market changes week to week, so there’s no single right answer here. What’s changed is that fixing isn’t the fringe option it was a couple of winters ago.
Ofgem says around 35% of households, about 11 million, are already on fixed tariffs and won’t feel October’s rise or a January price cap rise if it lands. They agreed a rate months ago and it doesn’t move until the deal ends.
The trade-off is the usual one. A fix protects you if prices keep climbing, but you don’t benefit if they fall instead, and most fixed deals charge an exit fee if you leave early, usually waived if you switch to another tariff with the same supplier. Here’s how fixed energy tariffs actually work if you want the mechanics before you compare.
A fix suits some households less than others. If you’re moving home in the next few months, mid-way through an existing fix, or in debt to your current supplier, the January price cap rise probably shouldn’t be the thing that decides whether you switch right now. Sort the bigger issue first.
Three checks worth making now
You don’t need to decide anything today. A few minutes now beats a scramble in November, when the real January price cap figure lands and everyone else decides to check on the same afternoon. Roo’s already halfway through comparing fixed rates, so you may as well let him finish the job.
Before winter lands
- Compare fixed deals against the current price cap rate, not last year’s bill, so you’re comparing like with like.
- Check your supplier’s exit fee and whether it’s waived if you switch to another of their tariffs.
- Submit a meter reading right before any change goes live, so you’re not billed the new rate for energy you used on the old one.
None of this is about panic. A calm decision in September just beats a rushed one once the pressure has already fed through to your bill, and by then everyone’s asking the same question at once. If you want the mechanics first, our guide to how the energy price cap works covers what it does and doesn’t limit, and we broke down October’s confirmed rise when it was announced.
Frequently asked questions about the January price cap
- Is the January price cap definitely rising 9%?
- No. That’s Cornwall Insight’s forecast, not a confirmed Ofgem figure. Ofgem sets the real January price cap in late November 2026, and wholesale gas prices can still move before then.
- Why does the £1,872 figure look low compared to previous winters?
- Because Ofgem changed its typical household consumption values on 1 July 2026, so recent cap figures are calculated on less energy than older ones. Ofgem’s own comparison: October’s £1,723 cap would have been £1,935 on the old 2023 values. Compare unit rates, or compare against October’s figure, rather than against a headline from a previous year.
- Why does gas move the price cap so much?
- Gas makes up around half of a typical dual fuel bill, and UK electricity generation still leans on gas power stations, so a rise in wholesale gas prices pushes up both parts of the January price cap.
- Does the price cap apply if I’m on a fixed tariff?
- No. The cap only limits what you pay on a standard variable tariff. A fixed deal keeps your rate the same regardless of what the January price cap does, for better or worse, until the fix ends.
- Will the electricity VAT cut help with the January price cap?
- A little. VAT on domestic electricity drops from 5% to zero from 1 October 2026 to 31 March 2027, so it applies through the whole January price cap period. It’s Great Britain only, Northern Ireland stays at 5%, and gas is unaffected at 5% UK-wide. It won’t offset a rise this size on its own.
- When will I know the real January price cap figure?
- Ofgem is expected to confirm it in late November 2026, a few weeks before it takes effect on 1 January 2027.
Sources
- Ofgem, Energy price cap will rise by 4% from October 2026, 26 August 2026. October cap of £1,723, the 35% / 11 million fixed tariff figure, and the £1,935 old-TDCV comparison.
- Cornwall Insight, Predictions and insights into the Default Tariff Cap. January 2027 forecast of £1,872.
- Ofgem, Energy price cap. How the cap is set and confirmed.
- GOV.UK, Temporary zero rate of VAT in Great Britain for domestic electricity. Dates, scope and the Northern Ireland position.
Checked 23 September 2026.
