Energy prices changed on 1 October
VAT on domestic electricity has been reduced from 5% to 0% following a UK Government decision. The price cap changed on the same date. Read more about the VAT change.
Energy price cap
Ofgem’s energy price cap limits what you pay for gas or electricity on a variable-rate tariff. Find out how it works – and how it affects your prices.
The price cap changed in October 2026
Ofgem announced that the new price cap is £1,723 for a typical household1 from 1 October until 31 December 2026. This is an increase of £60.
All about the price cap: the cap is set by Ofgem, the energy regulator. It affects the way energy suppliers can price their energy tariffs. The cap puts a limit on how much customers on variable tariffs pay for each unit of gas and electricity. It also sets a maximum standing charge – this is used to cover the cost of things like maintenance of pipes and meters.
What this means if you pay monthly
If you're on a variable-rate tariff:
Most customers on a variable tariff saw their annual costs go up on 1 October, in line with the new price cap. If your prices went up, we’ll have written to you to let you know. Remember: your actual bills still depend on how much energy your home uses.
If you're on a fixed-rate tariff:
The price cap doesn’t affect prices for fixed-rate tariffs. If you’re on a fixed-rate tariff, your prices won’t change until your current tariff ends.
You don’t need to do anything - we’ll update your prices for you on 1 October. You’ll be able to see your new prices on your energy bills/statements and online account from the same date.
What this means if you're on Pay As You Go
All Pay As You Go prices are variable – which means most customers' annual costs went up in line with the price cap.
From 1 October, the cap for a typical Pay As You Go home2 is £1,678 – that’s an increase of £58 over a year.
If you have a smart meter your prices will have updated automatically on 1 October
If you have a traditional meter your prices will update when you top up from 1 October
We’ll have written to you to let you know how this affects you if your prices are going up. Remember: your actual bills still depend on how much energy your home uses.
Useful to remember: if your home uses more energy, your costs can change.
If your home uses more energy, your costs can change
The price cap doesn’t put a limit on the total cost of your energy. Instead, it limits the amount you pay per unit of gas or unit of electricity – and for your daily standing charge. It can be helpful to think of it like filling up a car with petrol. The price per litre stays the same, but the total cost changes – depending on how much you fill up.
Energy price cap predictions
Understanding how energy prices are changing can help you stay in control of your bills.
The energy price cap changes every 3 months, which means prices on a standard variable tariff can go up or down each quarter. You can use our 5-quarter forecast below to see how future price cap changes might affect your home energy costs.
Our price cap predictions*
Here are our estimated annual costs for an average dual-fuel household on a standard variable tariff, paying by Direct Debit. Costs include VAT at rates from 1 October 2026 (5% for gas and 0% for electricity). Find out more on Ofgem’s website. These predictions should only be used as a guide. Your actual bills will be based on how much energy your home uses.
This table was last updated on 1 October 2026.
| From | Until | Average annual cost (price cap) | Confidence level |
|---|---|---|---|
1 October 2026 | 31 December 2026 | £1,723 | Confirmed |
1 January 2027 | 31 March 2027 | £2,067 | Very Low |
1 April 2027 | 30 June 2027 | £2,019 | Very Low |
1 July 2027 | 30 September 2027 | £1,821 | Very Low |
1 October 2027 | 31 December 2027 | £1,810 | Very Low |
You might save by moving to a fixed tariff
With a fixed tariff, your unit rates and daily standing charges stay the same for the length of your contract. This means your prices won’t change, even if the price cap does.
You can use the predictions table above to see the general trends for an average UK household. To get a personalised quote based on your real home energy use, head to the OVO app or log into your online account.
New to OVO? Get a quote here.
Important to know
*How we make our price cap predictions
There are a number of key factors that make up domestic energy tariffs and that impact our price cap predictions. These include:
Wholesale gas and electricity markets, which can be impacted by weather and geopolitical events
The cost of managing and maintaining the UK’s gas and electricity networks
Our predictions include our judgments about possible future policy changes, formulated using publicly available data. These are predictions, not guarantees, and they’ll change as market conditions and industry regulations evolve. OVO isn’t responsible for any variances or errors in long-term forecasting accuracy.
Predicted costs are based on average electricity and gas unit prices and standing charges for a customer on Direct Debit using Ofgem’s standard Typical Domestic Consumption Values (2,500 kWh for single rate electricity and 9,500 kWh for gas). Costs include VAT at rates from 1 October 2026 (5% for gas and 0% for electricity). Find out more on Ofgem’s website.
Ways to save
Fix your prices and get a free annual boiler service on us³
You might save by moving to one of our fixed-rate tariffs - and you can add on a free annual boiler service. Just head to your OVO app or online account to compare our tariffs and fix your prices.
Earn points by using off-peak energy
With Power Move, use 85% or more of your electricity at greener times of the day and get rewarded with points. Either use them on free electricity⁵ straight away, or bank them to use on bill credit later. Unlock Beyond and sign up to Power Move. Terms, conditions, and eligibility criteria apply.
Get rewards with Beyond
Our free loyalty programme rewards you just for being with us. From points and exclusive treats to banked solar panels and more, the longer you stay, the more rewards you get. Free to customers with smart meters that pay by Direct Debit, in the OVO app. Beyond, Beyond Points and Beyond offer terms, conditions and eligibility criteria apply.
Get a smart meter installed for free
See your home’s energy use in real time and spot ways to save with a smart meter. You’ll also unlock money-saving offers and rewards like Power Move.
Prices are lower with a Direct Debit
On average, customers save £1384 a year by choosing Direct Debit. You can set one up on your OVO app or online account. We'll review your Direct Debit regularly to make sure it covers your energy costs and that you're paying the right amount.
Send a reading before the price cap changes
Make sure your bills are correct: send your meter reading in your OVO app or online account.
If you need financial support, we’re here to help
We’re offering customers extra financial and practical support through OVO Extra Support. Customers can get extra financial help with bills, free home efficiency kits, or debt support. In the last 12 months, we’ve helped over 69,000 homes, totalling over £42 million. You can find out more and apply online.
If you’re worried about your energy bills, please contact our team – we can help.
Sources and references
Figures are for how much energy customers paying by Direct Debit typically use (9,500 kWh for gas and 2,500 kWh for electricity). This will vary based on actual household use.
Figures are for how much energy customers on Pay As You Go typically use (9,500 kWh for gas and 2,500 kWh for electricity). This will vary based on actual household use.
Terms and eligibility criteria apply - you must be a dual fuel homeowner and pay by Direct Debit. Not available for existing CORGI HomePlan and OVO Energy boiler cover customers. This plan automatically renews at the end of 12 months unless cancelled. This offer can be selected when choosing a fixed-rate tariff via your online account or our app and can only be redeemed once per household. We reserve the right to amend or withdraw this offer at any time.
This saving is based on a typical domestic dual fuel customer who uses on average 9,500 kWh for gas and 2,500 kWh for single-rate electricity, and will vary based on actual household use.
1.5 kWh cap will be applied to free electricity slots. Free electricity applies for home appliance energy use only. Energy consumed by a home EV charger, in-home battery or heat pump will be charged at your standard unit rates. See full terms and conditions.