Household energy bills in Great Britain changed on 1 October 2026 in two ways at once: Ofgem’s price cap went up, and the government took VAT off electricity. A forecast published at the end of September suggests a much bigger rise is on the way in January.
What changed on 1 October
Ofgem’s price cap for October to December 2026 means a typical household paying by direct debit sees prices rise by 4%. Ofgem puts the increase down to higher wholesale gas prices linked to the conflict in the Middle East, while noting that prices remain well below the peak of the 2022 energy crisis.
Under the cap, averaged across England, Scotland and Wales for direct debit customers on a standard variable tariff:
| Unit rate | Daily standing charge | |
|---|---|---|
| Electricity | 26.32p per kWh | 54.83p |
| Gas | 7.97p per kWh | 29.68p |
The electricity figures exclude VAT; the gas figures include VAT at 5%.
VAT taken off electricity until March
From 1 October 2026 to 31 March 2027, domestic electricity in Great Britain is charged at a temporary zero rate of VAT instead of 5%. The relief covers standing charges as well as the energy used, and applies to prepayment top-ups. It does not apply to gas, which is still taxed at 5%, and electricity in Northern Ireland stays at the reduced 5% rate.
The government estimates the cut takes around £45 off the yearly price cap. Because of the change, Ofgem says this quarter’s costs cannot be compared directly with earlier periods. When the zero rate ends on 31 March 2027, suppliers are due to switch back to 5%.
A forecast 16% rise in January
The consultancy Cornwall Insight forecast on 30 September that the price cap for January to March 2027 will be about £1,999 a year for a typical dual-fuel household, a rise of 16% or £276 on October and the largest increase since January 2023. The forecast depends on how the conflict and gas markets develop over the rest of Ofgem’s calculation period, and the official figure will come from Ofgem. Cornwall Insight’s Craig Lowrey warned that low gas stocks mean the effects could last for many more months.
Press reports in early October said ministers were considering extra support for lower-income households in the Budget on 28 October, with the Warm Home Discount mentioned as one option; no decision had been announced at the time of writing.
What households can do
Ofgem’s advice is to check whether a different tariff or payment method would cost less, look at off-peak or weekend electricity deals if you have a smart meter, and talk to your supplier early if you are struggling to pay: suppliers must offer help such as a repayment plan.
For practical ways to cut use, see our tips on saving energy at home and which appliances cost most to run. Our live UK grid page shows when electricity is at its cleanest during the day.