UK households on default energy tariffs will see a 4% increase in bills starting October 1, 2026, under the latest price cap adjustment announced by the energy regulator.
The price cap, which applies across England, Scotland, and Wales, will remain in effect through December 31, 2026. The next scheduled review is set for November 25, 2026, covering the first quarter of 2027.
For households on standard variable tariffs paying by Direct Debit, the average electricity rate will rise to 26.32 pence per kilowatt hour, with a daily standing charge of 54.83 pence. Gas prices will average 7.97 pence per kilowatt hour, alongside a daily standing charge of 29.68 pence.
The government will temporarily remove VAT from electricity bills from October 1, 2026 through March 31, 2027, meaning no VAT will apply to electricity charges during this period. Gas bills, however, will continue to incur a 5% VAT rate.
The price increase follows higher wholesale gas costs, driven by geopolitical tensions in the Middle East. Despite the rise, current energy prices remain below the peak levels observed during the 2022 energy crisis, when the government implemented a £2,500 bill cap.
The price cap applies to customers on default tariffs, regardless of payment method, including standard credit, Direct Debit, prepayment meters, or Economy 7 meters. Fixed-rate tariff customers are unaffected by the adjustment.
