The October energy cap has changed. It is still not a ceiling on your bill
News explained: the energy cap for October to December has changed, but the figure used to describe it is not a ceiling on what an individual household can spend.
Ofgem’s announcement puts the annualised cost for a typical household using gas and electricity and paying by Direct Debit at £1,723. That comparison uses assumed consumption. It does not promise that every bill will match that amount.
The distinction matters when checking a supplier’s tariff or deciding whether a payment looks reasonable. A household using more energy can pay more than the headline figure. Our explainer on why lower inflation does not mean lower prices covers a similar gap between headline figures and what people pay. A household using less can pay less.
What the energy cap controls
The cap limits the rates suppliers can charge customers on default tariffs, including the price of each unit of energy and the daily standing charge. It does not give a household an unlimited amount of energy for a fixed annual sum.
Ofgem’s October-to-December guide gives an average electricity unit rate of 26.32p per kilowatt hour and a daily standing charge of 54.83p for customers paying by Direct Debit on a standard variable tariff. For gas, the corresponding averages are 7.97p per kilowatt hour and 29.68p a day.
Those are averages across England, Scotland and Wales. They are not a single tariff applying to every home. Ofgem publishes regional rates and standing charges, and payment method and meter arrangements also matter.
Read the comparison carefully
The regulator describes the new energy cap for a typical household as a rounded 4% increase. Its published comparison uses updated Typical Domestic Consumption Values: assumptions about how much gas and electricity a typical household uses.
A change in that assumed consumption can change the headline presentation without showing how one particular household’s use has changed. Comparing only two annual figures, without checking their basis, can therefore give an incomplete picture.
The new period also includes a tax change. Ofgem says VAT has been removed from domestic electricity bills from 1 October 2026 to 31 March 2027. The cut was announced on 21 July by Prime Minister Andy Burnham as one of his first decisions in office, according to the government’s announcement. Ofgem’s electricity figures reflect that change; the gas figures include 5% VAT. The regulator cautions that you cannot compare costs directly with previous periods because of the change.
Fixed tariffs are a different question
The energy cap update is not itself a change to a fixed tariff’s agreed energy rates. That does not mean tax changes or changes in consumption leave a fixed-tariff bill untouched.
Before comparing offers, check the unit rates, standing charges, payment method, contract length and any exit fees. A lower advertised annual estimate may rest on different assumptions. This article does not recommend a particular supplier or promise that switching will save every reader money.
If the energy cap still leaves a bill hard to pay
Ofgem advises customers who cannot pay to contact their supplier and ask for support. Its guide says suppliers must help when asked, with possible measures including a repayment plan or emergency credit.
The useful starting point is the household’s own tariff and consumption, not the headline cap alone. Check the bill against those details, use the official regional tables for the relevant period, and keep a forecast for a future cap separate from a rate that has actually been announced.
Featured image: Prime Minister Andy Burnham, official portrait, 22 July 2026. Photo: Alecsandra Dragoi / No 10 Downing Street, OGL v3.0 via Wikimedia Commons (cropped).
