The October 2026 price cap, VAT on electricity, and what January might bring
Ofgem’s cap rises 4% from 1 October. Electricity loses its VAT until April. Here’s what that means for your bill, and for the fix-or-flex decision.
Ofgem announced the cap for 1 October to 31 December 2026 on 26 August. For a typical home paying by Direct Debit it rises 4%, to £1,723 a year. Ofgem’s typical home now uses 2,500 kWh of electricity and 9,500 kWh of gas a year: it lowered those figures in July to reflect how much less energy homes use than a few years ago, so the headline number isn’t directly comparable with older ones.
The new cap rates (Great Britain averages, Direct Debit)
| Unit rate | Standing charge | |
|---|---|---|
| Electricity | 26.32p per kWh | 54.83p per day |
| Gas | 7.97p per kWh | 29.68p per day |
Your own region’s cap is a little higher or lower; our prices page lists all 14 regions.
Why gas went up and electricity didn’t
Higher wholesale gas prices pushed the gas rate up. On electricity, the Government has removed VAT on domestic bills from 1 October 2026 to 31 March 2027, which offsets most of the wholesale rise. Without it, the typical bill would be around £45 higher.
January
Ofgem will announce the cap for January to March 2027 in late November. Forward prices for winter gas are higher than they were in the summer, and most forecasters expect the cap to stay at this level or rise again. Nobody can promise which way it goes.
Fix or stay flexible?
- Brightwell Flexible is priced at the cap, so it’s the cheaper choice today and it moves whenever the cap moves.
- Brightwell Fixed 12 costs a little more today and then doesn’t move for 12 months. If the cap rises in January and April, a fix bought now usually ends up the cheaper option over the year; if prices fall, it won’t.
We’d rather you chose with the numbers in front of you. Compare both for your home.