🔍What We Know So Far
The October 2026 cap has not been announced.
As of 21 July 2026, Ofgem has not published the price cap for 1 October to 31 December 2026. It will be confirmed by 26 August 2026. Every number on this page describing October is a forecast from an independent analyst, not a decision — and forecasters currently disagree with each other by well over £150 a year. We'll update this page with the confirmed figures as soon as Ofgem publishes them.
The starting point for any October forecast is where the cap stands today. Under the July 2026 cap, a typical dual-fuel household paying by direct debit faces £1,862 a year — up from £1,641 in the April–June quarter. Those are the rates you're paying right now, and they run until 30 September whatever happens in August.
One detail that matters more than usual this quarter: Ofgem's published cap figures include 5% VAT. The 26.11p/kWh electricity rate above is a VAT-inclusive number. From 1 October that VAT disappears on electricity, so the comparison between today's rates and October's won't be like for like — more on that below.
🗓️When Is the October Price Cap Announced?
Ofgem sets the cap quarterly and announces each level roughly five weeks before it takes effect. For the October–December 2026 period, the confirmed level is due by 26 August 2026, taking effect on 1 October 2026.
The level isn't plucked from the air on announcement day — it's calculated from costs observed during a fixed assessment window running 19 May to 18 August 2026. That window is the reason forecasts tighten as summer goes on: with every week of wholesale market data that lands inside it, less of the calculation is guesswork.
📊The October 2026 Forecasts Compared
Here's the honest position: forecasters do not agree. The published predictions span everything from a small rise to a meaningful fall, and the gap between the highest and lowest is bigger than the entire July increase was. Treat the numbers below as a range of scenarios, not a prediction.
The consultancy most widely quoted on cap forecasting has pointed to roughly £1,899 — a rise of about 2% on today's £1,862, or around £3 a month for a typical household. Cornwall Insight revises its forecasts as the assessment window fills in, so this figure can and does move.
Martin Lewis has referenced an expected price cap increase of around 3.1% on 1 October 2026, which on today's £1,862 would work out near £1,920 a year. He has also flagged a predicted further rise of around 2% in January 2027 — a forecast about a period even further out, so hold it loosely.
The supplier's own published prediction sits well below the others at roughly £1,747 — that would be a fall of around 6% from today's level, or about £115 a year less. The distance between this and the Cornwall Insight figure is exactly why a single confident number would be misleading.
Put together, the published forecasts describe a band of roughly £1,747 to £1,920 a year — from a noticeable fall to a rise of around 3%. The central expectation among most commentators leans towards a modest increase, but nobody is claiming precision this far from the close of the assessment window.
If you want to understand how these forecasts are built and how well they've held up historically, our price cap predictions guide walks through the mechanics.
🧾The Electricity VAT Cut Lands on the Same Day
This is the part that will make October's headline numbers confusing, so it's worth getting straight now. On 21 July 2026, new Prime Minister Andy Burnham announced that VAT on domestic electricity will be cut from 5% to 0%, running from 1 October 2026 to 31 March 2027.
Two things to be clear about. First, it applies to electricity only — gas keeps its 5% VAT. Second, it starts on 1 October 2026, the exact same day the new price cap takes effect.
Why the headline numbers will look odd
Ofgem's cap figures normally include 5% VAT — today's 26.11p/kWh electricity rate is a VAT-inclusive number. From 1 October, electricity rates under the cap will be restated without VAT. So you may see an electricity unit rate that looks lower than today's even if the underlying wholesale-driven cost has gone up. A cap rise and a tax cut arriving on the same date can partly cancel each other out on paper.
- Don't compare October's electricity rate directly to July's — one includes VAT, the other won't
- Gas is unaffected — the 5% VAT stays on gas, so any gas movement in the cap is a clean comparison
- The relief is temporary — it currently runs only to 31 March 2027, which is why a further rise is being forecast for January and beyond
- Electricity-heavy homes gain most — heat pumps, EVs and all-electric properties see proportionally more benefit than gas-heated ones
Our full electricity VAT cut guide breaks down what the change is worth to different household types and how it interacts with smart tariffs.
🏠What It Means for a Typical Household
If the central forecasts are roughly right, a typical household is looking at a change somewhere between a small saving and around £5 a month more — before accounting for the VAT cut, which pushes in the opposite direction on the electricity half of your bill. That's a materially smaller swing than the 13% jump in July.
But the timing matters more than the size. October is when heating goes back on. Even an unchanged cap means bills climb sharply in real terms through autumn simply because you're using more energy — and the October rates run through the whole of the first winter quarter.
The perennial point worth repeating: the price cap is not a cap on your total bill. It limits the unit rates and standing charges a supplier can charge on a default tariff. The typical-household figure is an illustration of what average usage costs, nothing more. Use less and you pay less — which is why the actions that reduce winter bills are the same regardless of what Ofgem announces on 26 August.
🤔Should You Fix Before October 2026?
With the announcement still weeks away and forecasts disagreeing by over £150, this is a genuine judgement call rather than a question with an obvious answer. The honest version:
- Fixing makes sense if you value certainty — you lock today's rates and the 26 August announcement can't touch you, which matters most if your budget has no headroom for a winter surprise
- The catch: fixed deals priced now already price in the market's expectations, and if the cap lands nearer the lower forecasts you could sit above the going rate for months
- The VAT wrinkle: check whether a fix passes the electricity VAT cut through to you from 1 October — a fixed rate quoted VAT-inclusive today may look different once the relief applies
- Smart tariffs are the third route — Octopus tariffs like Tracker and Agile follow wholesale prices, so they respond to market falls immediately rather than waiting for the next quarterly cap
- Waiting is cheap — Octopus charges no exit fees on variable tariffs, so you can switch now, see what 26 August brings, and move to a fix afterwards if you want to
There isn't a universally right answer here. What is clear is that sitting on a default tariff with an expensive supplier is the one option that loses in every scenario.
⚡How to Get Ahead of the October Cap
You can't control what Ofgem announces, but you can control what it applies to. The cap is a ceiling on default tariffs — it says nothing about how low your rates can go. And with electricity VAT dropping to zero from the same day, tariffs that lean on electricity get a second tailwind:
Your unit rate moves with the wholesale market each day, so you don't wait a full quarter for falls to reach you. If the market softens between now and the 18 August window close, Tracker customers feel it immediately. Built-in caps of 100p/kWh electricity and 30p/kWh gas protect against extreme spikes.
Prices change every 30 minutes and drop well below cap level overnight and when renewable generation is high. Shift the dishwasher, washing machine and charging into cheap slots and your effective rate falls — whatever the headline cap does in October.
For EV drivers this is the clearest cap-beater: overnight charging at around 7p/kWh against a cap electricity rate of 26.11p/kWh, with smart scheduling handled automatically. As an electricity-only tariff, it also benefits fully from the 0% VAT change.
Discounted scheduling windows sized to heat pump running patterns, typically saving around £219/year versus a gas boiler. With gas keeping its 5% VAT while electricity drops to 0%, the arithmetic for electrified heating improves further from 1 October.
Three things worth doing before 1 October regardless of the announcement:
- Switch and bank the £50 — the referral credit is certain in a way no forecast is, and it lands in your account when you switch via our link
- Submit a meter reading around 30 September — so your pre-October usage is billed at the old rates rather than estimated across the boundary
- Check when your fix ends — if it expires this autumn, you'll roll onto a cap-governed variable tariff, so decide before that happens by default
Our saving money guide covers stacking the £50 credit with the right smart tariff and Octoplus rewards, and how switching works walks through the five-minute process end to end.
✅Verdict — Prepare, Don't Predict
Verdict: Nobody knows the October number yet — and that's fine, because the useful moves are the same either way.
Ofgem confirms the October–December cap by 26 August, based on costs measured between 19 May and 18 August. Published forecasts span roughly £1,747 to £1,920 against today's £1,862 — a range wide enough that treating any single figure as fact would be misleading. Layered on top, electricity VAT falls from 5% to 0% on 1 October, so headline rates will be restated and won't compare cleanly with today's. What you can do now doesn't depend on the answer: get off an expensive default tariff, take the £50 credit, and pick a tariff that responds to falling prices rather than waiting a quarter for them.
Octopus Energy supplies 7.3 million UK households, has been Which? Recommended for 9 consecutive years, and holds a 4.8/5 Trustpilot rating from 779,000+ reviews — with no exit fees on variable tariffs, so switching before the announcement costs you nothing in flexibility. Compare every Octopus tariff before October, and check back here on 26 August for the confirmed figures.