Ofgem confirms October price cap: £1,723 a year, up 3.6%

Ofgem confirmed the energy price cap for 1 October to 31 December 2026 on Wednesday 26 August. A typical dual-fuel household paying by monthly Direct Debit will pay £1,723 a year — up 3.6%, or roughly £60, on the £1,663 that has applied since July. Ofgem rounds the rise to 4%.

Every confirmed rate

The electricity columns don't compare like for like

This is the detail most coverage will skip. Ofgem quotes cap rates including VAT. July's 26.11p includes 5% VAT; October's 26.32p includes 0%, because the electricity VAT cut takes effect on exactly the same day. So the underlying, pre-tax electricity price rose considerably more than that 0.8% headline implies — the tax cut is masking most of it.

Gas keeps its 5% VAT throughout, so the gas figures do compare directly. That 8.7% rise is entirely real. Ofgem has said the cap would have gone up around 6% without the VAT cut, which makes the relief worth roughly 2.5 percentage points off the headline — real money, but delivered as a smaller increase rather than as a reduction. Our VAT cut guide works through what that means on an actual bill.

January is forecast to be much worse

Cornwall Insight — which forecast £1,709 for October and came within £14 of the confirmed figure — now projects about £1,872 for January to March 2027. On the same consumption basis as October's £1,723 that is a further 8.7% jump, roughly £149 a year, arriving exactly when winter usage peaks.

One caveat worth carrying: on Ofgem's old typical-consumption basis the same forecast reads as £2,107. If you see that number quoted next to October's £1,723 it will look like a catastrophic jump that isn't real — always check which basis a figure uses. We explained that change here. Ofgem confirms the January cap in late November.

What to do about it

Martin Lewis has said people sitting on the cap should fix, noting the cheapest fixes are around 7% below the current cap level. With January forecast nearly 9% higher again, the usual argument against fixing — being trapped if prices fall — is doing much less work than normal.

The one thing that genuinely changes that calculation is exit fees. Most suppliers charge £25–£150 per fuel to leave a fix early, so up to about £300 for dual fuel. Octopus charges none on any tariff, fixed included, which turns a twelve-month fix into a price ceiling you can walk away from if the market turns. If you're on Flexible Octopus the new rates reach you automatically on 1 October — you don't need to do anything, and nothing protects you from January either.

Whichever way you go, work through should you fix your energy tariff first — the answer depends on your usage split between gas and electricity, and this quarter that matters more than usual.

Sources: Ofgem — Energy Price Cap, MoneySavingExpert and Cornwall Insight.