Energy bills jump 4% from October as Ofgem raises price cap
Typical UK households on standard tariffs will pay £1,723 per year from October—a £60 annual rise driven mainly by higher wholesale gas costs linked to Middle East conflict. Around 22 million households are affected; those on fixed tariffs are protected.
Ofgem has announced a 4% increase to the energy price cap effective 1 October 2026 through 31 December. The current price cap for a typical household paying by direct debit for gas and electricity is £1,663, and from October the price cap will rise by £60 per year (or £5 per month) to £1,723 for the average household using both electricity and gas if this level was sustained for a year.
Most of the increase in the price cap is driven by higher gas costs, with gas bills rising by 8%, meaning that households which do not use gas will see a much smaller increase of less than 1%. The energy price cap protects around 22 million households on default tariffs by limiting the maximum rates and standing charges that energy suppliers can charge. It is updated every three months to reflect changes in the underlying costs of supplying energy.
Government support and alternatives
The government has removed VAT from electricity bills from 1 October 2026 to 31 March 2027. As a result, VAT is not included in electricity bills for people covered under the energy price cap between 1 October and 31 December 2026. Around 35% of households are on fixed tariffs and will not be affected by this rise—this is about 11 million households.
If you are an expat on a standard variable tariff, expect your October energy bill to jump by about £5 monthly. However, the government's VAT removal will offset some of this increase for electricity. Consider switching to a fixed-rate tariff if rates are available below the October cap level, or investigate whether your property qualifies for government support schemes or supplier assistance programmes. Households in fuel poverty should contact their local authority or Citizens Advice for additional help.
Sources
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