Price cap rising from October
Ofgem has set the energy price cap at £1,723 a year for a typical dual-fuel household on direct debit from 1 October 2026. That is a 4% jump on the current level and comes on top of higher wholesale costs tied to events in the Middle East, plus lower renewable output during recent heatwaves. The government is removing VAT from electricity bills from the same date, which should shave around £45 off the average annual bill.
Fixed tariffs in more detail
A fixed tariff locks your unit rates for the length of the contract, usually 12 or 24 months. Your bill only changes if you use more or less energy, not because wholesale prices move. The number of households on fixed deals has risen sharply to around 22 million, according to Ofgem’s July 2026 data. Many fixed tariffs are currently cheaper than the new cap, so locking in can protect against further rises.
Who should consider fixing
If you like predictable monthly costs and want to avoid surprises when the next cap is set in January, a fixed deal may suit. Renters need to check their tenancy length against the contract term to avoid exit fees if they move. Homeowners and students in shared houses have more flexibility but should still compare exit fees and contract lengths before signing.
What to do next
Compare the fixed options available now against the new cap and the VAT cut. Our energy comparison tools let you see the full picture, including any exit fees and renewable choices, so you can decide whether fixing makes sense for your household.
