Ofgem has confirmed that the UK energy price cap will rise by 4% from 1 October 2026, increasing the typical annual dual-fuel bill from £1,663 to £1,723.
The regulator said the increase applies to the period from 1 October to 31 December 2026 and reflects the underlying costs of supplying energy. The price cap limits the unit rates and standing charges suppliers can charge customers on default tariffs.
The latest rise comes despite the Government’s removal of VAT from household electricity bills from October 2026 to March 2027. Ofgem said the average electricity unit rate will move to 26.32p per kWh, while the average gas unit rate will rise to 7.97p per kWh for direct debit customers.
“Our field team visits 4 million homes across Great Britain every year and sees the reality of the persistent cost of living crisis, largely fuelled by the cost of energy.”
Catherine O’Kelly, CEO of Calisen, the UK smart meter provider, said structural reform is still needed to bring down bills over the long term, but argued that some support is already available through smart meter-enabled tariffs.
Smart meters can allow suppliers to offer more flexible pricing, including cheaper off-peak electricity when renewable generation is high or wholesale supply is abundant. These tariffs can help households shift energy use to lower-cost periods while supporting grid balancing.
“Some of the cheapest energy deals are now offered to people with smart meters as suppliers look to match wholesale supply when it is abundant with consumer demand, translating to ‘free energy’ hours at off peak times to help balance the grid.”
However, O’Kelly warned that households most exposed to high energy costs may also be among those least able to access smart meters and the tariffs linked to them.
She pointed to barriers including landlord consent for social housing tenants and access issues in London, where smart meter uptake has historically lagged behind other parts of Great Britain.
“It is vital we work across industry and Government to unblock as many structural barriers as possible to the dynamic energy pricing available via smart meters and ensure everyone has access to the cheapest prices.”
The comments come as policymakers, regulators and energy companies face renewed pressure to reduce household bills while shifting the UK towards a more flexible, low-carbon energy system.
Ofgem has published further information on energy price cap unit rates and standing charges for the October to December 2026 period.
FAQs
How much will the UK energy price cap rise in October 2026?
Ofgem has confirmed that the energy price cap will rise by 4% from 1 October 2026, taking the typical annual dual-fuel bill to £1,723.
Who is affected by the October 2026 energy price cap rise?
The price cap affects households on default or standard variable tariffs. Ofgem says around 35% of households are on fixed tariffs and will not be affected by this rise during their fixed period.
Can smart meters help households access cheaper energy tariffs?
Smart meters can enable time-of-use and dynamic tariffs, which may offer cheaper electricity during off-peak periods or when renewable generation is abundant.
What barriers can prevent people accessing smart meters?
Barriers can include landlord consent in rented or social housing, property access issues and installation challenges in some locations.
