Ofgem confirmed on 26 August that the energy price cap for a typical dual-fuel household paying by direct debit will fall to £1,742 a year from 1 October, a reduction of £43, or 2.4%, on the £1,785 cap that has applied since July. The new figure covers the three-month period running to the end of December and applies to England, Scotland and Wales; Northern Ireland sets its own cap separately.
The regulator attributed the fall to lower wholesale gas prices over the summer months, pointing to stronger gas storage levels across Europe and increased imports of liquefied natural gas as the main drivers. Ofgem sets the cap on a rolling quarterly basis using average wholesale costs recorded over a defined assessment window, along with network, policy and operating costs that suppliers are permitted to pass on.
What changes on 1 October
The £1,742 figure is not a maximum bill — it caps the rate suppliers can charge per unit of gas and electricity, plus daily standing charges, for a household with what Ofgem defines as typical consumption. Actual bills still vary with how much energy a household uses. Under the new cap, the electricity standing charge moves to 60.1p a day and the gas standing charge to 31.2p a day, with unit rates set at 24.8p per kWh for electricity and 6.1p per kWh for gas.
Direct debit customers continue to pay less than those on standard credit or prepayment meters, though the gap has narrowed since Ofgem tightened rules on how suppliers can price different payment methods. Prepayment customers will see a cap of roughly £1,715 a year for the same usage profile, reflecting a separate standing-charge calculation Ofgem applies to that payment type.
How this compares with recent quarters
The October cap sits below the £1,785 level set for July to September but remains above the equivalent cap from a year earlier, when the October 2025 quarter opened at roughly £1,650. It is also well above the sub-£1,200 caps seen before the 2021–22 gas price spike, a gap that continues to shape how the government and consumer groups discuss affordability heading into winter.
Forecasters tracking wholesale markets had generally expected a fall of this size after the 26 August verdict date was flagged earlier in the month, though several analysts had pencilled in a slightly larger reduction closer to £1,700. The final figure landed within Ofgem's own published methodology bands, calculated from wholesale prices recorded between late May and late July.
Household impact and wider reaction
For a typical dual-fuel household on direct debit, the change works out at roughly £3.58 less a month compared with the current quarter — a modest fall that debt and fuel-poverty charities said would do little to shift affordability pressures for the households most exposed to high energy costs. National Energy Action, the fuel poverty charity, noted that millions of households remain on tariffs above pre-2021 levels even as the headline cap drops, with standing charges continuing to draw criticism for adding cost regardless of how little energy a household uses.
Ofgem said it would review standing charge methodology again before the January 2027 cap announcement, following repeated calls from consumer groups to reduce or restructure the fixed daily charge. No changes to that structure apply for the October-to-December period. Suppliers are required to notify affected customers of the new rates directly, with the change taking effect automatically for anyone on a standard variable tariff.
The next price cap announcement, covering January to March 2027, is due in late November, based on Ofgem's usual publication schedule roughly five weeks ahead of each quarter's start.