Energy Price Cap April 2027: Forecast

The energy price cap for 1 April to 30 June 2027 is a long way off, and only two suppliers have published a forecast for it. British Gas puts it at £2,190 a year (15 October 2026) and E.ON Next at £2,358 (26 October 2026), for a typical dual-fuel household paying by monthly Direct Debit. Both suppliers flag these as their least confident forecasts.

The headline point is that neither forecast sees much relief after January. The January to March cap is forecast at around £2,180, about 27% above October's £1,723, and the April forecasts sit level with that or above it. British Gas has April £5 above its January figure; E.ON Next has it £175 higher.

Then the Budget on 28 October 2026 changed the picture slightly. It extended the 0% VAT rate on household electricity from 31 March to 1 July 2027, which the Treasury says will take around £50 off the annual cap in April. Both April forecasts were published before that announcement, so they probably assume VAT went back to 5% on 1 April.

E.ON Next's £2,358 is the highest figure and the newest, updated on 26 October. It has January at £2,183, April at £2,358 (a further £175) and July at £2,133. E.ON labels all three as its “lowest” confidence level and says its predictions combine market prices with its forecast of other costs.

British Gas's £2,190, from 15 October, has January at £2,185, April at £2,190 and July at £1,975. It rates January “low” confidence and April and July “very low”, and says it updates the forecast every week, so expect it to move.

Cornwall Insight, the consultancy most often quoted on the cap, hadn't published an April 2027 forecast when we checked on 28 October; its latest figure is £1,999 for January (30 September). It has warned that if Europe comes out of this winter with low gas storage, refilling it over the summer could push prices higher, which is the main risk to the spring quarters. Our price cap predictions tracker adds each new forecast as it lands.

A word on accuracy. Forecasts made four to five months ahead have a wide margin of error, because most of the wholesale prices that will set April's cap haven't been observed yet. Cornwall Insight's final forecast for October 2026, made after the wholesale window had closed, was £1,709, just £14 under the £1,723 Ofgem set. Forecasts made in October for April are much rougher than that.

VAT on household electricity in Great Britain fell from 5% to 0% on 1 October 2026, and was due to return on 1 April 2027. In the Budget on 28 October, Chancellor John Healey extended it by three months, to 1 July 2027. The Budget document says the extension “is expected to take around £50 off the annual Ofgem price cap in April 2027”. Gas keeps its 5% VAT throughout.

Three things to understand about that £50:

• It's an annual-rate figure. The April cap only lasts three months, so a typical household saves roughly £12 to £13 over April to June, not £50.
• It's based on forecasts. The Treasury says it comes from its analysis of the average of suppliers' published cap forecasts. If electricity costs more than forecast, the VAT saving is a little bigger, and vice versa.
• It applies to fixed tariffs too. VAT is a tax on the supply, not part of the tariff, so 0% electricity VAT reaches people on fixes as well as on the cap. And when VAT returns on 1 July 2027, it returns for fixed tariffs too.

The full detail is in our electricity VAT cut guide and our Budget 2026 energy bills round-up, which also covers the £100 Household Energy Payment for council tax bands A–D in England from January 2027 and the plan to scrap gas standing charges by the end of 2027 or as soon as possible after. Neither of those changes the April cap itself.

Remember that cap figures are annual rates for a typical home, not your bill. The cap limits unit rates and standing charges on standard variable tariffs; a “£2,140 cap” means a home using 2,500 kWh of electricity and 9,500 kWh of gas would pay at that rate for a year. Use more and you pay more. A rough rule: your bill moves by about the same percentage as the headline.

The monthly figures above spread a year evenly. In practice you use far more energy in winter, so the January to March quarter costs more than April to June even at similar cap levels. Your Direct Debit is normally set to smooth that out over the year, which is why suppliers often raise it ahead of a forecast rise.

If you use a lot of gas, the April forecasts matter more to you, because gas has driven most of this winter's increase and the VAT extension doesn't touch it. If you're all-electric, the VAT extension is worth proportionally more.

Ofgem sets the cap every three months from wholesale prices observed over a set window. For January the window runs from 19 August to 17 November 2026, and Ofgem confirms the cap by 25 November. For April, MoneySavingExpert's timetable gives a window of 18 November to 15 February and an announcement by 23 February. That means April's cap is being priced right through this winter: a cold December or a fresh shock to gas supplies would feed straight into it.

The July 2027 forecasts are lower, at £1,975 (British Gas) and £2,133 (E.ON Next), but 1 July is also when VAT returns to electricity. Our January 2027 price cap guide covers the next quarter in detail and will be rewritten with Ofgem's confirmed figures when they're announced.

Octopus's 12M Fixed works out at about £1,948 a year for a typical home, and its 18M Fixed at about £1,888. Both are dearer than October's £1,723 cap, but cheaper than the January forecast of about £2,180 and both April forecasts.

Here's the arithmetic for the 12M fix, quarter by quarter. Until 31 December it costs you more than staying on the cap: about £56 extra over the quarter, in annual-rate terms. From January it saves about £58 a quarter if the cap lands near £2,180, so you're roughly even by the end of March. April is where the forecasts say you'd pull ahead: at British Gas's VAT-adjusted £2,140 the fix saves about £48 over the quarter; at E.ON Next's £2,308, about £90.

Averaging the four quarters from October to next September on each supplier's forecasts gives about £2,006 (British Gas) or £2,087 (E.ON Next) a year, against the fix's £1,948. Because winter quarters carry more of your usage than summer ones, the real gap is a little wider in the fix's favour. Two honest caveats: these forecasts are low-confidence, and when VAT returns to electricity on 1 July 2027 it returns on fixed tariffs too, adding about 5% to the electricity half of the fix for its final months.

The 18M fix is £60 a year cheaper again and runs well into 2028, beyond every published forecast. That longer reach is the risk as well as the attraction: if prices fall back sharply next year, you'd be locked in, or paying £75 per fuel to leave. Our fix or variable guide works through those scenarios, and Flexible Octopus remains the no-commitment option.

The early forecasts say April 2027 won't bring much relief from January's rise. The Budget's VAT extension trims about £50 off the annual figure, enough to turn British Gas's flat forecast into a slight fall, but E.ON Next still has bills rising again. Prices only start easing in the July forecasts, and that's the same day VAT comes back.

If you're on a variable tariff and want certainty through the winter and spring, a fix priced well below the January forecast is worth a look. If you'd rather keep your options open, a variable tariff with no exit fees lets you move the moment the picture changes. Either way, if you're switching to Octopus, using a referral link adds £50 of credit; this site receives £50 too when you use ours, and our how to switch guide covers the steps.