Ofgem confirmed the energy price cap would rise to £1,723 for a typical household from 1 October 2026, a 4% increase and the second consecutive rise this year. The earlier hope that the conflict in the Middle East might blow over quickly hasn’t materialised. Since the US and Israeli strikes on Iran began in late February, wholesale gas prices have moved sharply higher on several occasions, with periods of relative calm interrupted by renewed escalation. UK gas unit rates are now around 27% higher than a year ago, the highest level since early 2023.
Whether bills rise further from January 2027 depends on how the conflict develops over the coming weeks. What is not uncertain is that UK households remain exposed to international wholesale price movements, and the most effective response to that exposure is reducing how much gas your home actually uses. If you want to understand what is driving your heating costs and where to start, the house cold diagnostic helps identify whether your home has underlying efficiency problems worth addressing before winter.
What has happened to wholesale prices and why it matters for UK bills
The UK imports a significant proportion of its gas as liquefied natural gas, with supply routes running through the Strait of Hormuz and the broader Middle East corridor. Shipping traffic through the Strait has been repeatedly disrupted since the conflict began in late February, and Qatar’s Ras Laffan LNG terminal — which supplies around a fifth of global LNG — has faced repeated outages following Iranian strikes. Several rounds of ceasefire talks have taken hold only to break down again, keeping wholesale markets on edge for most of the year.
The price cap’s quarterly structure means the impact has arrived in stages. The April 2026 cap fell to £1,641, reflecting green levy removals rather than the conflict, which had only just begun. By July, sustained wholesale pressure pushed the cap up 13% to £1,663. October’s cap rose a further 4% to £1,723 — the second consecutive increase, and gas costs are now at their highest level since early 2023.
Forecasts updated — 11 September 2026
Ofgem confirmed the October cap at £1,723 on 26 August. For January 2027, Cornwall Insight forecasts a further 9% rise to £1,872. Some suppliers, including E.ON and Ovo, have pencilled in increases closer to 18% (£2,027–£2,041), and EDF and Bloomberg Economics have warned of rises of 25–30% if Middle East tensions continue to disrupt gas supply. The calculator below reflects all three. Ofgem will publish the confirmed January cap by 25 November 2026.
The cap is set quarterly based on average wholesale prices over an assessment period. The window that determines the January 2027 cap runs from 19 August to 18 November 2026, so there’s still time for prices to move in either direction. A durable de-escalation before then would limit the January impact; continued disruption feeds straight through into the confirmed figure.
Your January 2027 Bill Impact Calculator
Enter your current annual energy bill to see your projected increase under different forecast scenarios for the January 2027 cap.
Check your last bill or energy account. The UK average is around £1,723 on the current October cap.
Why the October cap doesn't protect you from what comes next
The October to December 2026 price cap is already set at £1,723 and cannot change again until 1 January 2027, regardless of what happens in wholesale markets between now and then. That gives households a defined, protected window through the rest of the year. It also means any further escalation in the conflict between now and mid-November won't hit your bill immediately — it will show up in the January figure instead.
What the cap doesn't do is insulate households indefinitely. The assessment window for January closes on 18 November, and whatever wholesale prices average over that period feeds directly into the confirmed cap. Ofgem announces the figure by 25 November, with the new rates taking effect on 1 January. At that point, the only way to reduce what you pay is to reduce what you use.
The April green levy removal and what it means for your bill
The April 2026 cap reduction wasn't primarily driven by falling wholesale prices. It was driven by the government's decision to remove the Energy Company Obligation and Renewables Obligation elements from unit rates and shift those costs to general taxation. This produced a reduction worth around £150 for a typical household, independent of wholesale market movements. That saving is permanent and doesn't disappear as the conflict pushes the cap back up — households are still better off than they would have been under the old levy structure, even with October's cap sitting well above April's £1,641.
The levy removal and the conflict-driven wholesale increase have been running in opposite directions all year. At Cornwall Insight's central January forecast of £1,872, the cap would be roughly 18% above the January 2026 level of £1,584. At the higher supplier and Bloomberg estimates, the increase would materially exceed anything the levy saving offset, putting typical bills close to levels last seen during the 2022–2023 energy crisis.
Off-grid households remain in a worse position
For the estimated 1.7 million UK homes that heat with heating oil or LPG rather than mains gas, the situation has been considerably more severe throughout the conflict. These households have no price cap protection at all. Heating oil and LPG prices track global oil markets directly, with no regulatory buffer and no quarterly review date smoothing the impact. The full picture for off-gas households, including a separate cost impact calculator, is covered in why the Iran conflict is hitting oil and LPG households far harder than gas.
What homeowners can actually do before January
The gap between a home that uses typical amounts of gas and one that uses significantly less is determined almost entirely by the building fabric: how well insulated the walls, floor, and loft are, how airtight the windows and doors are, and how efficiently the heating system distributes what heat it does produce. None of these change quickly, but several of the most impactful improvements are either free through grant funding or achievable in an afternoon.
Cavity wall insulation, for households that don't already have it, is the single highest-impact improvement available for most UK homes. The Warm Homes Local Grant currently funds this at no cost for households with income under £36,000 and an EPC rating of D or below. With the January cap likely to rise further, applying now rather than waiting is directly in your financial interest. The full eligibility criteria and application process are covered in the Warm Homes Local Grant guide.
Draught-proofing produces a faster result and requires no grant funding. Sealing gaps around windows, letterboxes, and under external doors reduces cold air infiltration, which reduces how hard the boiler has to work to maintain temperature. The most effective options and where to prioritise them are covered in the best draught stoppers for UK homes.
Radiator balancing is free to do yourself and improves how evenly heat is distributed around the house. A system where some radiators are overheating while others are underperforming wastes energy and reduces comfort simultaneously. The step-by-step process is covered in how to balance radiators properly.
Thermostat behaviour also matters more than most homeowners assume. Turning a thermostat down by one degree typically reduces gas consumption by around three percent. The relationship between thermostat settings and actual bills is covered in does turning the thermostat down save money.
Whether to fix your energy tariff now
Some fixed tariffs are currently priced £100 or more below the October cap. Whether fixing makes financial sense depends on your view of how the conflict develops over the next couple of months. If wholesale prices stay elevated or rise further through mid-November, the January cap increases and a fixed tariff taken now looks like good timing. If tensions ease and prices fall back, the variable cap could prove cheaper. The 18 November assessment window close is the key date — market movements after that point can't affect the January cap, so any decision about fixing should factor that in.
WarmGuide doesn't provide tariff switching advice. The MoneySavingExpert Cheap Energy Club and Ofgem's own comparison tool are the appropriate places to compare current fixed deals against forecast variable rates. If you're with OVO Energy or considering switching, their solar and heating packages are worth checking alongside any tariff comparison, as combining a fixed rate with solar generation reduces your exposure to wholesale price movements more fundamentally than a fixed tariff alone. Regardless of which tariff you're on, reducing your consumption is the most reliable hedge against bill volatility.
The longer-term picture
The conflict has kept UK household bills exposed to global wholesale gas prices for most of 2026, more than four years after the original 2021 energy crisis first made this exposure visible. Bills have already risen in two consecutive quarters, and forecasters expect a third rise in January. The structural answer to that exposure is reducing how much gas UK homes burn, through insulation, heat pumps, and efficiency improvements — exactly what the Warm Homes Local Grant and the broader Warm Homes Plan are designed to accelerate.
In the shorter term, the window before January is the most useful period in which to act. Improvements made now reduce your consumption before the next cap takes effect, maximise the benefit of any grant funding currently available, and put your home in a better position regardless of where prices end up. For a full overview of everything currently available, the energy grants and support hub covers all active schemes, and the complete guide to keeping a UK home warm for cheap covers the efficiency improvements with the best return for the typical UK home.
Frequently asked questions
Did energy bills go up in 2026?
Yes, in every quarter since April. The cap fell to £1,641 in April (driven by green levy removal, before the conflict took hold), then rose 13% to £1,663 in July and a further 4% to £1,723 in October, driven by sustained wholesale gas price pressure from the Middle East conflict.
What is the energy price cap forecast for January 2027?
As of 11 September 2026, Cornwall Insight forecasts £1,872, a 9% rise on the October cap. E.ON and Ovo have pencilled in increases closer to 18% (£2,027–£2,041), and EDF and Bloomberg Economics have warned of rises of 25–30% if the conflict continues to disrupt gas supply. Ofgem confirms the actual figure by 25 November 2026, based on wholesale prices through 18 November.
Why are energy prices still elevated in late 2026?
The underlying cause remains the conflict in the Middle East, which began with US and Israeli strikes on Iran in late February 2026 and has continued in phases since, disrupting shipping through the Strait of Hormuz and gas exports from Qatar's Ras Laffan terminal. Because the price cap is set using average wholesale prices over each quarter's assessment window, sustained disruption keeps feeding through into successive caps.
Should I fix my energy tariff before January 2027?
That depends on your view of how the conflict develops over the next couple of months. Fixed tariffs currently available are priced below the October cap, which means fixing offers some protection if wholesale prices keep rising. If tensions ease and prices fall back before mid-November, remaining on the variable cap could prove cheaper. MoneySavingExpert's Cheap Energy Club and Ofgem's comparison tool are the best places to compare current deals against forecast variable rates.
Are heating oil and LPG prices still affected by the conflict?
Yes, and more severely than mains gas. Heating oil and LPG prices are linked to global oil markets and aren't covered by the energy price cap, so there's no regulatory ceiling on what suppliers can charge. Off-grid households have faced the full impact of every price swing since the conflict began, with no quarterly smoothing. The full picture for oil and LPG users is covered in our dedicated guide on why the Iran conflict is hitting oil and LPG households far harder than gas.
