Disclaimer: Information correct as at 15 October 2026.

 

Energy bills rose again in October 2026 and further increases are currently forecast for January. For households already worried about the cost of keeping their homes warm this winter, that will be unwelcome news. Here’s what has changed, what could happen next and some practical steps you can take to avoid paying more than you need to.

What changed on 1 October?

Ofgem, the energy regulator, increased the energy price cap by 4% from 1 October to 31 December 2026.

For a typical household using gas and electricity and paying by direct debit, the illustrative annual cost increased from £1,663 to £1,723. Your actual bill will depend on how much energy you use, where you live and how you pay.

At the same time, the Government temporarily reduced VAT on domestic electricity bills in England, Scotland and Wales from 5% to 0%. This applies from 1 October 2026 to 31 March 2027 and is applied automatically, including to customers on fixed tariffs. Gas and other domestic fuels remain subject to 5% VAT.

The Government estimates that removing VAT from electricity will save households an average of £45 a year, although the actual amount will depend on how much electricity you use.

What is the Energy Price Cap?

The Energy Price Cap is set by Ofgem and updated every three months. It limits the unit rates and standing charges that energy suppliers can charge customers on default tariffs.

It is important to remember that the price cap does not limit your total bill. Your bill will still depend on how much energy you use.

If you are on a fixed tariff, the October increase in the price cap will not directly change the rates you agreed to pay. However, it is still worth checking when your deal ends, what you are currently paying and whether any exit fees apply.

If you are not sure which tariff you are on, check your latest bill or contact your energy supplier.

What could happen in January?

Unfortunately, further increases are currently expected.

As of 8 October, forecasts suggested that the price cap could rise by around 21% in January 2027. This would take the illustrative annual figure for a typical household from £1,723 to around £2,084.

However, this is only a forecast. The January price cap has not yet been set and Ofgem is expected to announce it by 25 November, so the position could change.

Higher wholesale gas prices continue to be a major factor behind rising household energy costs. Ofgem said that higher wholesale gas prices resulting from the ongoing conflict in the Middle East were the main reason for October’s increase.

What can you do?

There is no single solution that will be right for every household, but there are some practical things worth checking.

Check whether you could get a better energy deal

If you have been with the same supplier for some time, don’t assume that you are still on the best deal available.

Compare the cost of your current tariff with other options. There are several comparison services available, including:

• MoneySavingExpert Cheap Energy Club
• Uswitch
• Which?
• Simply Switch

It can be worth checking more than one comparison service as the tariffs available may differ.

Think carefully before fixing

Many suppliers are offering fixed tariffs, which can provide some certainty about the rates you will pay for a set period.

With further increases in the price cap currently forecast, a fixed tariff might be attractive. Ofgem said in August that fixed tariffs were available at £100 or more below the October price cap.

However, fixing isn’t automatically the cheapest option. If prices fall, you could end up paying more than you would on a variable tariff. Check the unit rates, standing charges, length of the deal and any exit fees before deciding.

Keep your meter readings up to date

If you do not have a smart meter that is sending readings automatically, submit regular meter readings to your supplier.

This helps make sure your bills are based on the energy you have actually used rather than estimates.

Look at where you could use less energy

Reducing the amount of energy you use can help bring down your bills, but we know that many households have already made changes and there may be limits to how much further you can cut back.

Concentrate on changes that are safe and realistic for your household. If you are struggling to keep your home warm, seek advice rather than simply turning your heating down further.

Check how you pay

Don’t assume that one payment method will always be cheapest. Check the rates available from your supplier and compare the overall cost for your household.

For the October price cap, Ofgem said prepayment customers had the lowest capped rates and could pay around £45 less than customers paying by direct debit at typical levels of consumption.

Do you heat your home with oil?

Many households in rural Cambridgeshire are not connected to mains gas and rely on heating oil instead.

Heating oil is not covered by Ofgem’s Energy Price Cap, so changes in the price of oil can feed through directly to the amount households pay.

If you are struggling to afford heating oil, help may be available through the Cambridgeshire Oil Crisis & Resilience Fund.

The fund offers one-off grants of up to £400 to eligible households in Cambridgeshire that rely on heating oil and are facing exceptional financial pressure. It covers Cambridgeshire but not Peterborough.

There are eligibility conditions. These include having 150 litres of oil or less remaining and receiving, or being eligible for, Universal Credit, Pension Credit or income-based Employment and Support Allowance. Households can only receive one grant from the fund.

You can apply directly or ask an organisation such as Cambridgeshire ACRE to refer you.

Find out more about the Oil Crisis & Resilience Fund.

The fund is available on a rolling basis and may close at short notice once the available funding has been used, so it is worth seeking help as soon as possible if you think you may be eligible.

There is help available locally

If you are worried about your energy bills or struggling with the cost of living, please don’t wait until things reach crisis point before asking for help.

Support may include:

• advice about your energy bills and tariffs
• help to reduce household energy costs
• benefits checks
• help to identify grants and other financial support
• referrals to local support schemes.

Cambridgeshire ACRE and other local organisations can help you understand what support may be available and point you in the right direction.

If you are concerned about your energy bills this winter, get in touch and we’ll see how we can help.