This is a live page. Last updated 21 August 2026. Ofgem is due to confirm the October to December price cap by Wednesday 26 August, and we’ll update every figure here the same morning.
Ofgem confirms the October to December 2026 price cap by Wednesday 26 August, and the forecasters have already shown their hand. Cornwall Insight’s final forecast, updated 19 August, puts the typical annual bill at £1,729, up about 4% from today’s £1,663. E.ON Next reached the same figure a month earlier. At the same time, VAT comes off electricity entirely from 1 October, worth about £45 a year for a typical home, so the rise and the tax cut will come close to cancelling each other out. Here’s everything that’s known before the announcement, and where your postcode fits into it.
Key takeaways
- Ofgem announces the October to December cap by 26 August 2026. New rates apply from 1 October.
- Cornwall Insight forecasts £1,729 a year for a typical dual-fuel home paying by direct debit, up about £66 (4%) on the current £1,663. E.ON Next’s forecast is the same.
- VAT on electricity drops from 5% to 0% from 1 October to 31 March 2027, worth about £45 a year. If the cap rises as forecast, that saving is mostly absorbed.
- The cap limits unit rates and standing charges, not your total bill. What you pay depends on how much you use, how you pay and where you live.
October is a busy month for household costs. Alongside the cap change, Amazon usually runs a sale in the first half of the month, though 2026 dates are still unannounced. We track that on our Prime Big Deal Days 2026 page.
When will Ofgem announce the October price cap?
Ofgem has to confirm the level by Wednesday 26 August 2026, and it normally publishes on the morning of the deadline day. The new rates run from 1 October to 31 December, the fourth and final cap period of 2026. The wholesale pricing window Ofgem uses to set the level has already closed, which is why Cornwall Insight issued its final forecast on 19 August. At this stage the forecasts usually land within a pound or two of the confirmed figure.
How much is the cap forecast to rise?
Both major forecasts point the same way: a rise of about 4%, or roughly £66 a year for a typical dual-fuel household paying by direct debit.
| Period | Typical annual bill | Status |
|---|---|---|
| July to September 2026 | £1,663 | Confirmed by Ofgem (a 13% rise on spring) |
| October to December 2026 | £1,729 | Cornwall Insight forecast, 19 August |
| October to December 2026 | £1,729 | E.ON Next forecast, 28 July |
One thing to watch when the headlines land: these figures use Ofgem’s updated typical-use numbers, introduced in July 2026. Some coverage still quotes the old basis, which produces bigger-looking totals for exactly the same rates. Under the current cap the actual charges are 26.11p per kWh for electricity with a 57.19p daily standing charge, and 7.33p per kWh for gas with a 29.04p daily standing charge, averaged across Great Britain for direct debit customers.
What does the VAT cut on electricity do?
On 21 July the government announced that VAT on household electricity drops from 5% to 0% for this financial year, running from 1 October 2026 to 31 March 2027. The Treasury puts the saving at about £45 a year against the price cap for a typical home, and the cut applies to the whole electricity bill, standing charge included. Gas keeps its 5% VAT.
The catch: the timing means most households won’t see their bills fall. MoneySavingExpert’s analysis made the point plainly, with Martin Lewis saying “no one is really going to feel very much change in their pocket”. A 4% cap rise takes back most of what the VAT cut gives, so the realistic outcome for a typical home is a winter bill that holds roughly level rather than one that drops.
Will your standing charge change?
Ofgem publishes the new regional standing charges on announcement day, alongside the headline figure. Standing charges are the part of the cap your postcode controls: the GB average is 57.19p a day for electricity and 29.04p for gas, but the regional spread is wide. Our UK Standing Charge Postcode Report found London pays the least at 74.30p a day combined, Merseyside and North Wales the most at 100.18p, a £95-a-year gap before either home has used any energy at all. We’ll update the report’s regional table as soon as the October rates are out.
Two things move standing charges in October. The cap resets the regional rates themselves, and the VAT change takes 5% off the electricity standing charge as part of the wider cut. Whether the underlying rates rise or fall region by region is exactly what 26 August will settle.
Who does the price cap actually affect?
The cap applies to standard variable and default tariffs, which is where you end up if you’ve never switched or a fixed deal ended without you picking a new one. That covers most GB households. If you’re on a fixed tariff, your rates are locked until the fix ends and October’s announcement changes nothing for you until then. Prepayment and standard-credit customers are capped too, at slightly different levels from direct debit.
Why are bills going up again?
Wholesale gas is still the engine of the cap, and it hasn’t settled. The US-Iran ceasefire steadied markets over the summer, but Cornwall Insight’s Dr Craig Lowrey called it “a pause, not a resolution”, and winter demand always pushes the October period harder than the summer quarters. July’s cap had already risen 13% on spring. The October movement is smaller, but it lands just as heating comes back on, which is why it will be felt more.
What can you do before 1 October?
Check what a fix would cost you now. Plenty of fixed deals are priced below the current cap, and a fix signed before the announcement locks rates that don’t move on 1 October. The catch: most fixes carry exit fees, so if wholesale prices fall next year you’re committed at this winter’s level. Compare any offer against the forecast rates above, not just today’s.
The other lever is using less of the expensive units. Our UK Heating Cost Index compares what each heating type costs to run, and cheap-to-run swaps add up over a winter: a slow cooker on low for eight hours costs about 42p in electricity against roughly £1.04 for two hours of an electric oven, worked at current cap rates, and our slow cooker guide has picks from £15. If you’re thinking bigger, the home energy grants guide covers what’s still available this year, and the solar savings calculator works out payback at the rates you’re actually paying.
What happens after December?
The January to March 2027 cap gets announced in late November. Cornwall Insight’s June view was a slight drop from January, though still above the bills seen at the start of 2026, and it will publish updated January forecasts once the October level is confirmed. The VAT cut runs until 31 March 2027, so the six months it covers span both cap periods. We’ll fold the January forecasts into this page when they firm up.
Questions people ask
What date is the October 2026 price cap announced?
Ofgem must confirm it by Wednesday 26 August 2026 and usually publishes on the morning of the deadline. The rates take effect on 1 October and run to 31 December.
Is £1,729 the most I would pay?
No. The cap limits the unit rates and standing charges suppliers can charge, not your total bill. The £1,729 figure describes a household with typical use paying by direct debit. Use more and you pay more; use less and you pay less.
Will the VAT cut make my bill cheaper?
On its own, yes, by about £45 a year for a typical home. But if the cap rises about 4% as forecast, the two roughly cancel out and a typical bill holds close to level over the winter. Gas is unaffected, since the cut only covers electricity.
Should I fix my energy tariff before the announcement?
That depends on the deal in front of you, so compare it against both the current cap rates and the forecast October rates. A fix below today’s cap protects you from the expected rise, but check exit fees before signing, because they’re what you’d pay to leave if prices fall later.
Why is my standing charge different from someone else’s?
Standing charges vary by distribution region, because the cost of running the local network gets passed to the households in it. The gap between the cheapest and dearest regions is about £95 a year at current rates. Our Standing Charge Postcode Report breaks down all fourteen GB regions.
Sources
- Ofgem, Changes to energy price cap between 1 July and 30 September 2026
- Ofgem, Energy price cap
- Cornwall Insight, Predictions and insights into the Default Tariff Cap (updated 19 August 2026)
- Cornwall Insight, Household energy costs look set to remain high through winter (30 June 2026)
- GOV.UK, New PM cuts tax on household electricity bills (21 July 2026)
- MoneySavingExpert, Electricity VAT to be scrapped for six months from 1 October
Figures checked on 21 August 2026. Forecasts are forecasts: the confirmed cap may differ, and this page will be updated when Ofgem publishes it.