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UK energy price cap to rise by 4% in October, increasing typical annual bills to £1,723

The £60 increase is driven by higher wholesale gas costs stemming from the US-Israel war with Iran, affecting roughly 33 million households on standard variable tariffs.

Updated Aug 26, 2026 · 08:23 UTC1 reports

The short version

  • UK energy regulator Ofgem will increase the energy price cap by 4% in October, raising typical annual dual-fuel direct debit bills by £60 to £1,723.
  • The hike is primarily driven by an 8% rise in wholesale gas costs linked to the US-Israel war with Iran, while households using only electricity will see an increase of less than 1%.
  • About 33 million households on standard variable tariffs in England, Scotland, and Wales will be affected, while around 11 million households on fixed tariffs will see no immediate change.
  • The government's removal of VAT from domestic electricity bills offset part of the surge, preventing an additional estimated £45 increase.

Key facts

  • Ofgem's October price cap will raise typical annual energy bills by £60, from £1,663 to £1,723, for dual-fuel households paying by direct debit in England, Scotland, and Wales.[BBC News]
  • The price cap covers approximately 33 million households on standard variable tariffs, while roughly 11 million households on fixed-term deals are unaffected.[BBC News]
  • Wholesale gas costs pushed gas bills up by 8%, whereas non-gas households will experience an overall bill increase of under 1%.[BBC News]
  • Average daily standing charges for direct debit customers remain largely unchanged between July and September 2026 at 57.19p for electricity and 29.04p for gas.[BBC News]
  • Heating oil is not covered by the Ofgem price cap, leaving roughly 1.5 million UK households, including 500,000 in Northern Ireland, exposed to unregulated price increases.[BBC News]

What remains uncertain

  • The exact impact on individual households will vary depending on location, property type, energy efficiency, occupancy, weather, and total usage.[BBC News]

Sources