Holding page. Ofgem announces the 1 January to 31 March 2027 price cap on Wednesday 25 November 2026. Until then, every January figure on this page is a forecast, labelled as one. We will replace them with Ofgem's confirmed rates on the day. Last checked 25 October 2026.
The cap running now, 1 October to 31 December 2026, is £1,723 a year for a typical dual-fuel household paying by direct debit. The latest public forecast for January, from Cornwall Insight, is £1,999.28: a rise of about £276, or 16%. Cornwall Insight describes it as the largest rise since January 2023. Below are the forecast rates, what they would mean per hour for a heater, a blanket or a unit of gas heat, and what to check before 1 January.
The short version
- Ofgem announces the January to March 2027 cap on 25 November 2026. It takes effect on 1 January 2027.
- Now: £1,723 a year. Electricity 26.32p per kWh plus 54.83p a day; gas 7.97p per kWh plus 29.68p a day (GB average, direct debit).
- Forecast (Cornwall Insight, published 30 September 2026, page updated 14 October 2026): £1,999.28 a year. Electricity 30.28p per kWh plus about 55p a day; gas 9.76p per kWh plus about 31p a day.
- On those forecast rates, the electricity unit rate rises about 15% and the gas unit rate about 22%. Standing charges barely move.
- Electricity carries no VAT until 31 March 2027. Ofgem confirmed this for the October cap, so it applies to the January quarter as well.
- The cap limits unit rates and standing charges, not your total bill. Households on a fixed tariff see no change until the fix ends.
Current rates against the January forecast
| GB average, direct debit | 1 Oct to 31 Dec 2026 (confirmed) | 1 Jan to 31 Mar 2027 (forecast) |
|---|---|---|
| Electricity unit rate | 26.32p/kWh | 30.28p/kWh |
| Electricity standing charge | 54.83p/day | about 55p/day |
| Gas unit rate | 7.97p/kWh | 9.76p/kWh |
| Gas standing charge | 29.68p/day | about 31p/day |
| Typical annual bill | £1,723 | £1,999.28 |
The forecast is reproducible. Ofgem's typical household uses 2,500 kWh of electricity and 9,500 kWh of gas a year. At the forecast rates that comes to £757.00 of electricity units, £927.20 of gas units and about £313.90 of standing charges: £1,998.10, within £1.20 of Cornwall Insight's £1,999.28. The gap comes from the rounded standing charges.
What the forecast would mean per hour
| Running cost | Now (26.32p, 7.97p) | January forecast (30.28p, 9.76p) |
|---|---|---|
| Anything drawing 1kW, for an hour | 26.3p | 30.3p |
| 2kW fan heater, an hour on full | 52.6p | 60.6p |
| 70W electric under-blanket, an hour on full | 1.8p | 2.1p |
| A kWh of heat from a 90% efficient gas boiler | 8.9p | 10.8p |
| Heat pump SCOP needed to match that gas boiler | about 3.0 | about 2.8 |
| Standing charges for a year, dual fuel | £308.46 | about £313.90 |
Gas rises faster than electricity in the forecast. That lowers the efficiency a heat pump needs to beat a gas boiler on running cost, from about 3.0 to about 2.8. Our heat pump vs gas boiler comparison and the appliance running cost calculator are rebuilt when the new cap takes effect.
What happens on 1 April 2027
The VAT cut on household electricity runs until 31 March 2027. Unless the government extends it, 5% VAT returns on electricity from 1 April 2027, on top of whatever the April cap brings. We explain the arithmetic on our electricity VAT cut page.
What to check before 1 January
- Whether you are on the capped standard variable tariff or a fix. Your annual statement or app says which.
- Your own usage. Swap 2,500 and 9,500 for the kWh totals on your annual statement and the same rates give your capped cost, which can be a long way from the headline.
- A meter reading on or just after 1 January, so the old and new rates are split correctly.
This page does not recommend any tariff, and it is not financial advice.
Questions people ask
When is the January 2027 price cap announced? Ofgem says it will announce the 1 January to 31 March 2027 cap on 25 November 2026, and may publish earlier if external factors require it.
How much will energy bills go up in January 2027? No one knows until Ofgem announces. The latest Cornwall Insight forecast, updated 14 October 2026, is £1,999.28 a year for a typical dual-fuel direct debit household, about 16% above the current £1,723.
Does the VAT cut still apply in January? Yes. Electricity carries no VAT from 1 October 2026 to 31 March 2027, so the January quarter is inside the cut. Gas keeps its 5% VAT.
Sources
- Ofgem, Changes to energy price cap between 1 October and 31 December 2026: current rates, VAT position and the 25 November 2026 announcement date. Read 25 October 2026.
- Cornwall Insight, 16% price cap rise forecast in January: published 30 September 2026. Read 25 October 2026.
- Cornwall Insight, Predictions and insights into the default tariff cap: updated 14 October 2026. Read 25 October 2026.
Changes to this page: 25 October 2026, published as a holding page with forecasts. It will be updated with Ofgem's confirmed rates on 25 November 2026.