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Energy price cap will rise by 4% from October 2026

ended 26. August 2026

Energy regulator Ofgem has today (Wednesday 26 August) announced a 4% increase of the energy price cap for the period covering 1 October to 31 December 2026 – the highest level for three years.

The energy price cap protects around 22 million households on default tariffs by limiting the maximum rates and standing charges that energy suppliers can charge. It is updated every three months to reflect changes in the underlying costs of supplying energy.

The current price cap for a typical household paying by direct debit for gas and electricity is £1,663. Based on the energy use of a typical domestic household, from October, the price cap will rise by £60 per year (or £5 per month) to £1,723 for the average household using both electricity and gas if this level was sustained for a year. Around 35% of households are on fixed tariffs and will not be affected by this rise- this is about 11 million households.

  • What is your reaction to the news?
  • How will this affect people in an already difficult cost-of-living crisis?
  • What tips do you have for households to reduce their energy bills?

Responses asap.

4 responses from the Newspage community

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Harry Goodliffe
Director at HTG Mortgages
Winter is when this Government's promises freeze. Energy bills were supposed to be falling by now, yet from October the cap rises to £1,723, its highest in three years, landing on 22 million households just as the heating goes back on. But don't worry, there'll be a shiny announcement about cheap bus fares to soften the blow. For families already juggling rent or a mortgage, food and childcare, another £5 a month simply adds to the pile. Shop around and fix a decent tariff if you can, because waiting for the Government to sort this out will leave you cold.
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Justin Moy
Managing Director at EHF Mortgages
First, there is no need to panic: the increase is about £1 a week on average, and it won't suddenly affect how much you can borrow on a mortgage or how much petrol you can put in your car in the coming weeks. But it does encourage us all to check our household habits, and a popular option is to invest in Hive or a similar heating control system, and schedule when you switch your heating and hot water on and off. You'll be surprised how many still have the heating on in the summer, wasting more than the £5 a month increase. Smarter controls and the use of an App to monitor your home efficiency, will make significant savings on a modest investment.
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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
Is £5 a month a crisis on its own? No. But I've taken the calls, and it's never just the £5. It's the £5 on top of everything else.
Here's the bit everyone skips. Households get a cap. Small businesses get a bill. I look after loads of small firms and not one is protected. The salon, the corner shop, the little factory pay whatever the market charges, then a member of staff knocks on the door asking for a rise because their bills went up too. Both sides are skint. Neither is the villain.
And hybrid working quietly shifted the heating bill from the employer's meter into the employee's front room. Nobody wrote that into a policy.

So beyond switch and fix, two things nobody tells you. If you work from home because your job needs you to, claim the working from home tax relief. Hardly anyone does. And ask your employer what's already in your benefits. Plenty of small firms pay for an Employee Assistance Programme with free money advice and half the team never knew. Asking costs nothing.
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Tony Sanchez
Founder at Bridging Loan Directory
A further £5 a month may not sound dramatic in isolation, but households do not experience price rises one bill at a time. Energy sits alongside food, council tax, mortgages, rent and insurance, so repeated increases gradually remove any financial breathing room.

As a householder and small-business owner, I also see the wider effect. When essential household costs rise, people have less to spend with local and independent businesses.

The price cap is not a limit on the total bill; what a household pays still depends on its usage. I would check whether a competitive fixed tariff is available, compare the unit rates and standing charges rather than relying on the headline saving, and check for exit fees. Small reductions in wasted heating and electricity can help, but people already using energy carefully should not be made to feel that a rising bill is simply the result of personal failure.