Energy price cap to rise by 4%

From 1 October to 31 December 2026, the energy price cap will rise by 4% for a typical household that pays by Direct Debit. See if you could save by switching today.

Energy

Q: Can I switch energy supplier if I owe money?

If you have bills that are more than 28 days old, you might find that you can’t change energy supplier until you’ve paid them. But there are some exceptions. If you’re on a prepayment meter and you owe money, for example, the energy supplier you switch to will take on the debt and you repay them instead.

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Why switch gas and electricity suppliers?

There are several reasons to do an online energy comparison and consider switching your supplier:

Save money

Comparing energy suppliers and deals each year can potentially save you money on your gas and electricity.

At Compare the Market we’re constantly monitoring the energy market to help you find the right deal for your home.

Get better service

Even if you’re on a lower-cost contract, you may be unhappy with your energy supplier’s service.

Switching to a supplier with better customer service could make life a lot easier.

Greener energy

You might want a supplier that uses more renewable energy.

With over half of the UK’s electricity supply having come from renewable sources in 2025, green suppliers could soon offer some of the cheapest energy deals¹.

Variable vs fixed energy tariffs

Most people are either on a variable or fixed energy tariff.

Variable energy tariff

Your unit rate can change over time
You'll get advance notice if your rate is going to change
You won't be charged more than the energy price cap per unit of energy
Great for flexibility to switch fee-free whenever you want
Can be more expensive than a fixed tariff when the price cap goes up

Fixed energy tariff

Your unit rate is locked in for the duration of your contract – even if the price cap rises
Can work out cheaper than variable tariffs if the price cap rises
Ideal for predictable prices, easy budgeting and peace of mind around price cap announcements
You'll miss out on cheaper energy if the price cap falls below your fixed rate while you're in contract
You'll likely need to pay an exit fee to switch before your fixed contract ends

Quick tip

If your fixed term is ending and you don’t do anything, your current supplier will likely switch you to a variable tariff at the end of your contract. This could be more expensive, so it’s worth shopping around for a better deal before then.

What is the energy price cap?

If you’re on a variable-rate tariff, the amount you pay for your energy can go up or down, usually depending on what’s happening to the price cap.

The energy price cap is set by Ofgem every three months, and it sets a limit on the unit rate and standing charge that suppliers can charge on their standard variable tariffs.

The unit rate is the cost charged per unit of electricity or gas you consume, measured in pence per kilowatt-hour (kWh).

The standing charge is the fixed daily fee providers charge to supply your service. You have to pay this no matter how much energy you use.

For the period 1 July to 30 September 2026, the price cap is set at:

£1,862

for those paying by direct debit

£1,812

for those with a prepayment meter

£2,005

for those who pay on receipt of their bill

Price cap to rise by 4% from 1 October

The energy price cap will rise by 4% for a typical household that uses gas and electricity and pays by Direct Debit.

The price cap will be equivalent to £1,723. Ofgem says the average household on a supplier's standard default tariff will pay around £5 a month more.

Are prices definitely increasing?

This might sound like a reduction on the current level of £1,862 stated above, rather than an increase.

That's because Ofgem updated it's Typical Domestic Consumption Values in July to reflect that households are using less energy overall. This means the 4% rise from October is actually based on a starting figure of £1,663.

The most important thing to know is that this is just a typical usage calculation, and the price cap is still going up.

Bear in mind

The price cap doesn't set the maximum amount you’ll pay for your energy; it just limits the rates that providers can charge. The above figures are based on average annual usage for a typical household. So if you use more than that, you’ll pay more.

The energy price cap doesn’t apply to households in Northern Ireland.

How much does energy currently cost in the UK?

Based on the current price cap, energy rates are set at:

	Gas	Electricity
Unit rate per kWh	7.33p	26.11p
Daily standing charge	29.04p	57.19p

This means that the average home on a variable tariff and paying by Direct Debit pays roughly £155 a month for energy. But that number can vary depending on:

Where you live
Your energy usage
Your energy tariff
How you pay your bills.

Why are energy prices going up?

The upcoming 4% rise in the energy price cap is a result of higher wholesale gas prices, according to Ofgem. It puts this down to the ongoing conflict in the middle east.

Neil Kenward of Ofgem says: "High international gas prices are continuing to drive energy costs in the UK. We welcome the government's intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter.

"Savings are available by choosing a fixed tariff, which are available at £100 or more below the October price cap."

Compare tariffs now

What does the new electricity VAT cut mean for me?

Prime Minister Andy Burnham recently announced the removal of VAT from domestic electricity bills, effective from 1 October 2026. The change will apply for six months.

The removal of VAT will save households around £45 per year on average. Actual savings will vary depending on electricity usage.

What our expert says...

“Lots of households will be looking at switching tariffs or locking in a new deal following the uncertainty driven by the global events of recent months. It is a good idea to have a look at what is out there to check if you could save by locking in a new deal.

“Moving to a fixed tariff can also provide protection from price volatility, as it locks in unit rates for the duration of the contract. This can offer greater certainty over monthly costs and help with budgeting."

Tom Lyon, Insurance and utilities expert

How do energy bills work?

In this quick video, money expert Guy Anker explains how energy bills and the price cap work.

This video is hosted by YouTube. By pressing play, you consent to their use of cookies. See their cookie policy for more information.

Text transcript

So your energy bills are typically made up of two elements: a standing charge, which is a bit like line rental on a phone. It's just an amount you always pay every day, regardless how much you use. It's fixed. And then the unit rate of the gas or the electricity that you're using, which obviously the amount you pay fluctuates based on how much you use.

A lot of people ask about fixed-rate tariffs. These are where the unit charge and the standing rate is literally fixed. It doesn't mean the amount you pay is fixed. That depends on how much you use, but it gives you an element of surety to help you budget.

And these days, lots of people talk about electric vehicle tariffs where they have an electric vehicle, sometimes called EV tariffs. These are where you get a deal where the rate is significantly cheaper overnight than what it is during the day. The hours could vary depending on provider. It means you can charge your car overnight for a lot less.

People often talk about the energy price cap because every three months or so it's reviewed by the regulator Ofgem. And that means every three months or so it changes. It can go up, it can go down. It's a cap on the unit rate of your energy and standing charge. It's not a cap on the actual pounds and pence you pay that will move up and down depending on your usage, but it does mean those underlying rates are capped for that period.

How to compare energy and switch supplier

It all happens in just three simple steps:

Enter your postcode

We’ll show you an estimate of your current energy spend and usage. You can update anything that doesn’t look right.

Compare energy deals

We’ll provide you with a list of deals that may be available to you. You can filter this to suit your needs. Choose your preferred tariff, fuel and payment type, and more.

You can also see your potential savings by clicking the ‘Tariff details’ button.

Make the switch

Once you’ve found a deal you’re happy with, provide us with a few details about yourself, and your new energy supplier will take care of the switching process.

How do I know which supplier is right for me?

There are some factors you might want to consider when choosing an energy supplier:

Is the deal it is offering below the energy price cap?
Do you want to switch to a fixed energy tariff?
Does the provider have a good reputation for customer service?
What’s the supplier’s record when it comes to green energy and renewables?
Does the provider charge exit fees if you leave a tariff early?

How long will it take to switch energy suppliers?

Most energy switches now complete within five working days, although timings can vary depending on supplier circumstances.

What happens when I switch?

Your gas and electricity supply will carry on as normal when you switch energy suppliers. The only thing that changes is where your bills come from.

What if I change my mind about switching?

You’ll have a 14-day cooling-off period, starting from when you agree your new contract. You can cancel without a penalty during this time.

Find out how easy it is to switch energy suppliers in our full guide.

Close up of a woman with an energy meter

What support is available if I’m struggling with my energy bills?

Ofgem rules state that all energy suppliers must have plans in place to help customers who can’t afford to pay their bills.

These rules mean suppliers must offer payment plans that customers can afford. And you can ask for ‘emergency credit’ if you use a prepay meter and can’t afford to top up. There are also grants available to some customers to help with energy bills.

If you’re having difficulties, contact your energy supplier as soon as possible. If you’re worried about what to say, take a look at this MoneyHelper guide to talking to your creditor.

For more information, see our guide on what to do if you can’t afford your energy bills.

You should also check whether you’re entitled to the Winter Fuel Payment.

Learn about energy options

Explore how energy tariffs, suppliers and usage work to help you make informed choices

Energy plans & supply

Energy tariffs

Review tariff types, payment choices and what shapes energy prices

Usage & efficiency

How much energy am I using?

Track usage, read meters and understand what drives household demand

Policy & support

Energy grants and schemes

Explore grants, supplier schemes and help with energy bills

Billing & costs

Prepayment meters

Learn how prepay meters work, where to top up and support available

See all our energy guides

FAQs

Can I compare gas and electricity quotes separately?

You can compare gas and electric quotes separately or together (also known as ‘dual fuel’). While dual fuel is a popular way to keep your energy bundled, you can also get gas and electricity from different providers. Check both to see what works out cheaper.

What’s the cheapest way to pay for gas and electricity?

The cheapest way to pay your gas and electric bill is usually via direct debit. If you don’t already, consider paying by direct debit if you can, as this could save you money.

Where can I get the cheapest gas and electric?

This depends on whether you choose a fixed tariff or a price-capped tariff. Ultimately, the best way to save on gas and electricity is to shop around for cheap energy deals.

Is it easier to switch gas and electricity together?

Switching dual fuel or switching one energy type on its own are both simple when you use Compare the Market.

The only potential complication would be if you’re on a fixed-term contract that hasn’t yet expired. In this case, you may have to pay an exit penalty.

Can I switch energy supplier if I owe money?

If you have bills that are more than 28 days old, you might find that you can’t change energy supplier until you’ve paid them. But there are some exceptions.

If you’re on a prepayment meter and you owe money, for example, the energy supplier you switch to will take on the debt and you repay them instead.

How can I switch gas and electricity when moving home?

If you’re moving house and you’re happy with your existing deal, your energy supplier might let you move it to your new home. Just give them your new address and the moving-in date.

On moving day, take a meter reading before you leave your old address and give this to your supplier. This way, you can be sure your final bill will only reflect what you’ve used.

Be sure to also take a meter reading at your new home straight away too, to avoid paying for energy used by the previous owner.

Can I switch energy provider if I rent?

Tenants can switch energy providers if they pay the supplier directly for their gas and electricity.

If your landlord pays your energy bills then charges you, choosing the energy supplier is up to them. Although you can always ask them if it’s possible to switch to the cheapest energy supplier.

Can I get a smart meter if I switch gas and electricity?

This should be an option, yes. You can ask your current energy supplier for a smart meter and it'll let you know if it’s possible to get one and when.

The government has proposed that suppliers should take ‘all reasonable steps’ to have smart meters in all homes by 2030.

Some suppliers may offer beneficial tariffs for smart meter users.

How can I find a green energy supplier?

When you compare energy suppliers with Compare the Market, you’ll be able to see tariffs for 100% renewable energy.

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Reviewed 26 Aug 2026 by Dan Tremain Energy and business energy expert

Dan is focused on helping people and businesses get the right deal for their energy in a volatile market. For more than 20 years, he has been introducing, developing and managing product propositions across a variety of industries, including energy, insurance and banking, all to get the right outcome for customers.

Methodology

¹ GOV.UK Energy Trends January to March 2026