What the price cap is
The energy price cap is set by Ofgem, the energy regulator. It limits two things on standard variable tariffs, also called default tariffs:
- the unit rate, what you pay for each kilowatt hour (kWh) of gas and electricity;
- the standing charge, a fixed daily amount you pay whether or not you use any energy.
It is reviewed every three months to follow the cost of supplying energy.
The cap from 1 October to 31 December 2026
| Fuel | Unit rate | Daily standing charge |
|---|---|---|
| Electricity | 26.32p per kWh | 54.83p |
| Gas | 7.97p per kWh | 29.68p |
- At these rates, a typical household paying by Direct Debit would pay £1,723 a year.
- That is 4% higher than the July to September 2026 cap of £1,663, about £60 a year or £5 a month more.
- Most of the rise is on gas. Electricity rose only slightly, helped by no VAT on electricity from 1 October 2026 to 31 March 2027. Gas still carries 5% VAT.
Your own rates depend on your region and how you pay. Your supplier must tell you before they change.
Why £1,723 is not a limit on your bill
The cap limits prices, not bills
£1,723 is what a typical household would pay over a year at the capped prices. There is no ceiling on your total bill: if you use more energy than a typical home, you pay more.
In July 2026, Ofgem updated what it counts as typical use, because homes now use about 7% less electricity and 17% less gas than at its last review. On the old basis, the same October prices come to £1,935 a year. Both figures describe identical rates, so compare unit rates and standing charges rather than headline numbers.
Who the cap applies to
- Standard variable tariffs: yes. Your rates change when the cap changes.
- Fixed tariffs: no. Your rates stay as agreed until the fix ends. Ofgem estimates around 11 million households, about 35%, are on fixed tariffs.
- Prepayment meters: yes, with their own capped rates.
- Heating oil and LPG: no. These are not covered by the cap, so their prices can change at any time.
What happens next
- By 25 November 2026: Ofgem announces the cap for 1 January to 31 March 2027.
- 31 March 2027: the current zero rate of VAT on electricity is due to end.
When a new cap is announced, submit a meter reading on the day it starts, so you are billed at the right rate for the energy you used before and after the change.
What it means for how you heat your home
Gas is cheaper per unit than electricity, but a heat pump produces several units of heat for each unit of electricity it uses, so the price per unit alone does not tell you which is cheaper to run. The ratio between the two prices matters, along with how efficient your system is.
- See how the sums work in our guide to heat pump running costs.
- Compare the two systems in heat pump vs gas boiler.
Using less is the one thing the cap cannot do for you
Because the cap sets prices, the biggest saving under your control is using less: insulation, efficient heating and good controls. Grants can help with all three for some households.
Check whether a grant could cut your heating costs
Pick the grant you want to check. Three quick checks, then our team calls you back. It is free, with no obligation.
If you are worried about your bills
The price cap does not reduce anyone’s bill on its own. If you are struggling, see help with energy bills this winter for the Warm Home Discount, Winter Fuel Payment, Cold Weather Payments and council help, and contact your supplier early about a payment plan.
