Ofgem published the updated energy price cap levels for charge restriction period 17a on 26 August 2026, covering the three months from 1 October to 31 December 20261. The Direct Debit cap rises to £1,723, Standard Credit to £1,861, prepayment to £1,678 and Economy 7 Direct Debit to £1,0461. The first three are 4% higher than the July to September levels; Economy 7 is 1% higher1.
All figures use the 2026 Typical Domestic Consumption Values at medium consumption: 2,500kWh for electricity, 9,500kWh for gas and 3,400kWh for multi-register meters such as Economy 71. The typical domestic consumption values were lowered from 2,700kWh of electricity and 11,500kWh of gas, which is why the headline figure differs from figures published under the old definition2.
| Payment method | July to September 2026 | October to December 2026 | Change |
|---|---|---|---|
| Direct Debit | £1,663 | £1,723 | 4% |
| Standard Credit | £1,796 | £1,861 | 4% |
| Prepayment (PPM) | £1,620 | £1,678 | 4% |
| Economy 7 (Direct Debit) | £1,039 | £1,046 | 1% |
Ofgem said the wholesale cost allowance rose 11% and now makes up 47% of the total cap, up from 44% in the previous quarter1. The gas wholesale allowance is up 13% and the electricity wholesale allowance up 10% on the previous quarter1. Ofgem attributed the movement primarily to continued conflict and geopolitical instability in the Middle East, compounded by extreme temperatures across Britain and Europe, LNG supply risk and low wind generation increasing reliance on gas-fired generation1.
"Today we have published the updated cap levels for charge restriction period (“cap period”) 17a, covering the three months from 1 October to 31 December 2026."
The government has reduced VAT on all electricity bills from 5% to zero for 1 October 2026 to 31 March 2027; VAT on gas remains at 5%1. Average standing charges under the October to December Direct Debit cap are 54.8p a day for electricity and 29.7p a day for gas, or 84.5p a day for dual fuel customers4. The electricity standing charge falls 2.4p a day in October because of the VAT removal, while the gas standing charge rises 0.7p a day, largely from a higher supplier operating cost allowance4. Standing charges make up 18% of a typical dual fuel bill under the Q4 2026 cap, down from a peak of 24% in Q3 20244.
National Energy Action said the cap rise means a typical household will pay £1,723 a year and described it as a three-year high that eclipses the VAT cut on electricity2. It said energy debt stands at £6 billion and has grown every quarter since autumn 20222. The Energy and Climate Intelligence Unit said wholesale gas prices recently reached a three-year high and that further bill rises are expected in January5. Energy Saving Trust said annual bills for a typical dual fuel Direct Debit household in Great Britain rise by £60 a year, and noted that Ofgem does not set prices in Northern Ireland6.
Why it matters for households
The cap limits unit rates and standing charges on standard variable tariffs, not the total bill, so a household using more or less than the typical consumption values will pay more or less than the headline figure6. The gap between payment methods persists: Standard Credit is £138 a year above Direct Debit and prepayment £45 below it at typical use1. The price cap rates by payment method turn on how each method recovers fixed costs, and the standard credit versus direct debit difference reflects higher supplier operating and debt-related costs for quarterly billing4.
Because standing charges are fixed, they take a larger share of the bill for low-consuming homes: at Ofgem's low consumption level for electricity, standing charges make up 32% of the annual bill4. The Economy 7 and restricted meter billing cap moved least, at 1%, because multi-register meters are billed on a different consumption basis1. The VAT change applies to electricity only, so a household's exposure to gas wholesale costs, which Ofgem said rose 13%, is unchanged1. Ofgem said it was not making a policy decision or exercising judgment in updating the cap, only applying updated inputs to formulae set by previous decisions1.
What happens next
Ofgem said it will publish later in the week its decision on an allowance covering suppliers' costs of the Bill Discount Scheme, which supports funding of a new government scheme providing discounts to households near new or upgraded electricity transmission, starting from April 20271. It also published a programme of work for 2026 and 2027 setting out planned reviews and priorities, focused on supporting consumers through the energy crisis, balancing investability and consumer protection, and adapting to Market-wide Half-Hourly Settlement8.
The next cap, for 1 January to 31 March 2027, will be announced on or before 25 November 2026, with an assessment period of 19 August to 17 November 20267. Uswitch reported supplier predictions averaging £2,152 for that period, a 25% increase, based on predictions as of 16 September 20267. The government has not confirmed whether it will offer financial support for energy customers beyond the VAT cut on electricity; any further support could be announced around the autumn budget on 28 October3.
Sources8 cited
- Summary of changes to energy price cap 1 October to 31 December 2026, ofgem.gov.uk
- Price cap rise: low-income and vulnerable households need a proper ‘breathing space’ on energy bills and debt - National Energy Action (NEA), nea.org.uk
- October energy price cap announcement due this week: here's what to expect - Uswitch, uswitch.com
- Energy standing charges - House of Commons Library, commonslibrary.parliament.uk
- Energy & Climate Intelligence Unit | Ofgem energy price cap: comment, eciu.net
- October 2026 energy price cap: our response - Energy Saving Trust, energysavingtrust.org.uk
- Energy price cap 2026: how much is it and how does it work? - Uswitch, uswitch.com
- Energy price cap: programme of work for 2026 and 2027 | Ofgem, ofgem.gov.uk