Brief
Ofgem price cap set to rise 4% in October, with further jump forecast for January
The October increase comes as the government removes VAT on electricity, while analysts predict a larger rise in January.
By Felo News Desk · Published
Ofgem announced a 4% increase to the UK energy price cap effective 1 October, taking the average household bill for gas and electricity to £1,723, according to two Independent reports published on 30 September 2026.
What happened
The regulator’s new cap will apply to more than four million homes on standard tariffs in England, Scotland and Wales. The rise adds about £5 a month, or £60 a year, to the typical bill if the level remains constant for twelve months. The October change coincides with the government’s removal of the 5% VAT on household electricity, a measure that will save the average payer roughly £45 a year.
What the reports add
One Independent article noted that the October hike follows a rise in wholesale gas prices linked to the ongoing Middle‑East conflict. It also quoted Uswitch urging customers without smart meters to submit readings before the end of the month to avoid higher charges. The second Independent piece added that analysts at Cornwall Insight forecast a much larger increase in January, projecting the typical annual bill could climb to £1,999 – a 16% rise and the highest level in four years.
What was said
Prime Minister Andy Burnham, speaking to the BBC, acknowledged the pressure on household finances and said the government was considering all measures to help people in “very difficult times”. The Independent reported Burnham’s comment without providing a direct quote.
How it came about
The price‑cap increase follows a series of energy‑cost pressures highlighted in recent Felo coverage, including the 2027 Energy Bill Rise Forecasts article that warned of bills potentially exceeding £2,000 in 2027. Earlier this month, the Institute for Fiscal Studies suggested time‑varying tariffs could mitigate such spikes, but the immediate driver remains volatile global markets.
Key facts
- Ofgem’s price cap rises 4% on 1 October, taking the average household bill to £1,723. (independent.co.uk)
- The government’s removal of VAT on electricity saves the average payer about £45 a year. (independent.co.uk)
- Cornwall Insight forecasts the typical annual bill could reach £1,999 in January, a 16% increase. (independent.co.uk)
Where accounts differ
- Projected bill level for January: Cornwall Insight forecasts the typical annual bill could rise to £1,999. (independent.co.uk); No specific January figure given; only the October cap of £1,723 is detailed. (independent.co.uk)
Timeline
- 2026-09-30 — Ofgem announces 4% price‑cap increase effective 1 October.
- 2026-09-30 — Government removes VAT on household electricity.
- 2026-09-30 — Cornwall Insight forecasts a further rise to £1,999 in January.
