What this guide covers
This guide explains what changed in the October 2026 price cap, including the new VAT rate on electricity, and why gas and electricity bills are moving in different directions this quarter. It is educational information on how the cap works, not a substitute for checking your own bill or comparing tariffs directly.
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The headline figure
Ofgem confirmed on 26 August 2026 that the energy price cap for 1 October to 31 December 2026 is £1,723 a year for a typical dual-fuel household paying by direct debit, up £60, or 4%, from £1,663. This is the maximum a supplier can charge per unit of energy and standing charge for someone on a default tariff, not a cap on any individual bill, which still depends on how much energy you actually use.
You may also see the same change reported as a rise to roughly £1,935 rather than £1,723. Both figures describe identical unit rates. Ofgem updated its assumed typical household usage on 1 July 2026 to reflect falling average consumption, so any figure quoted before that date on the old basis is not directly comparable to one quoted since. See our guide on why there are two figures for the full explanation.
Why electricity and gas moved differently
The rise is not spread evenly across your bill. Electricity's unit rate rose only slightly, from 26.11p to 26.32p per kWh, and its standing charge fell, from 57.19p to 54.83p a day. Gas moved much more: its unit rate rose from 7.33p to 7.97p per kWh, and its standing charge rose from 29.04p to 29.68p a day.
The reason for the gap is the VAT change landing on the same day as the cap. From 1 October 2026 to 31 March 2027, VAT on domestic electricity drops from 5% to 0%. Gas keeps its 5% VAT throughout. Ofgem's own figures suggest the cap would have risen by around 6% without the VAT cut, so the VAT change is doing real work here. It arrives as a smaller rise on your electricity rather than as money back on your bill. Gas has no equivalent offset, which is why its increase is the more noticeable one this quarter.
What are the unit rates from October 2026?
The national average rates under the October 2026 price cap for direct debit customers are:
- Electricity unit rate: 26.32p per kWh (0% VAT)
- Electricity standing charge: 54.83p per day (0% VAT)
- Gas unit rate: 7.97p per kWh (5% VAT)
- Gas standing charge: 29.68p per day (5% VAT)
These are national averages. Your actual rates depend on your distribution network region. Regional rates vary slightly due to differences in local network costs.
For your specific regional rates, see the price cap rates by region tool.
What this means for your actual bill
If you are on a default or standard variable tariff, you do not need to do anything. Your supplier applies the new rates automatically from 1 October. What you pay depends on your actual usage, region, payment method, and meter type, not just the headline figure. Households with higher gas usage, particularly during the colder months this cap period covers, will feel the gas-side increase more than the relatively flat electricity side.
If you are on a fixed deal, none of this affects your rate until your fixed term ends, since fixed tariffs sit outside the price cap entirely.
To compare fixed and variable options at your postcode, use the fixed vs variable calculator.