October 2026 energy price cap: should I fix my tariff?
What's changing? The average typical dual-fuel energy bill will go up by about 4%, or £60/year, on October 1st (that's about £5 a month).
Will my prices increase? Flexible and variable rates will rise; fixed tariffs will remain locked.
Should I fix now? You can lock in a rate below the October cap or wait it out to see what happens — read on to weigh up the pros and cons.
Ofgem has announced the new energy price cap for October 1st to December 31. It will climb by 3.6% (pushing a typical, medium-sized home’s bill for gas and electricity up £60 to £1,723 on average). Wondering what the price cap actually is and how it's calculated? Jump to our FAQs.
Why are energy prices going up again?
The day after Andy Burnham became prime minister, he announced that the government was removing VAT on electricity bills, saving the average family about £45 a year. So why have prices actually gone up?
At the time of Burnham's move, our CEO, Greg Jackson, wrote on our blog that it was a good start but cautioned that prices were still likely to rise in October because of the war in the Middle East.
Sadly, his prediction has come true. Prices would have risen more without the government's VAT cut, but it simply wasn't enough to prevent rises because the wholesale cost of gas is still so high thanks to the continuing war.
We believe strongly in electrification as a way to bring down bills, and it's worth noting that the lion's share of the price cap rise has come from gas. Let us break it down:
The gas unit price is up 8.7%
The gas standing charge is up 2.2%
The electricity unit rate is up 0.8%
The electricity standing charge is DOWN 4.1%.
All this means that electricity-only customers may face a much smaller rise in their unit rate (and some, with very low usage, may even see their bills fall because of the lower standing charge.) Though as we approach winter, usage is likely to rise, pushing up bills. Don't forget that the price cap doesn't cap total bills; it simply caps the unit rate and standing charge.
We know that customers are already struggling. We still believe that building a renewable, electrified energy system, which would enable us to stop letting expensive gas dictate the price of cheap renewables, is the key to cushioning us from these ever-more frequent global shocks.
What does Greg Jackson say about the Ofgem cap?
Greg Jackson, the founder and CEO of Octopus Energy Group, said: "The government’s decision to take VAT off electricity and remove some of the levies from bills has helped soften the blow this winter, but bills are still too high.
“Britain remains far too exposed to volatile global gas prices. The wars in Ukraine and Iran have created an unprecedented double crisis, with gas prices more than doubling since the start of the year.
“We urgently need to reform the market, make better use of our wind, and let people benefit from cheaper prices when green energy is abundant.”:
Will my energy bills rise in October?
No direct debit? Your cap is higher
If you pay by monthly Direct Debit, the price cap goes up 3.6% higher, at £1,723 a year on average for a typical dual-fuel household.
If you pay on receipt of a bill, it'll be a 4% rise to £1,861 a year.
Should I fix my tariff now? What are my options?
Sticking with a flexible tariff
If you decide to stay on your existing tariff, we’ll email you in the next few weeks to map out your new rates. Some things to consider:
Always below the cap: Octopus lobbied for the introduction of the price cap to stop big suppliers from profiteering. We have kept our Flexible prices below Ofgem’s cap every single day since it started.
The “wait and see” approach: What happens to the cap in January depends on global energy markets and geopolitical tensions. If you're comfortable staying flexible, you could see how the land lies later in the year.
Locking in a fixed tariff
If you hate uncertainty and prefer knowing exactly where you stand, fixing locks your rates in for the next 12 months.
The maths right now: Our current fixed tariff (as of 26 August 2026, but we do often tweak it) is sitting at £1,699. That's £24 lower than the October price cap, so fixing now would beat the rise and protect against any further rises in the January cap.
Just so you know: We’re not big fans of exit fees, but we do need to run our business prudently. If you take out a 12 -month fixed tariff with us, we buy a years' energy for you upfront at that price. If you decide to switch away from that tariff, we still have to cover the cost of the energy we bought for you. At the moment, given the volatile markets, we have an exit fee of £50 per fuel.
Could a smart tariff save you money?
if you've got green tech at home — like solar panels, home batteries, a heat pump or an EV — make sure you're on one of our dedicated tariffs to get the absolute maximum value out of your setup.
Whichever tariff you choose, you'll always get competitively priced energy, zero profiteering, and our outrageously good customer care (we’ve been a Which? Recommended Provider for 9 years running).
Struggling to pay? We've got your back
We know that, especially as we go into the cooler months, energy bills can be a big source of anxiety. Please don't worry in silence. If you are struggling, reach out to us. Our team cares deeply about supporting our customers, and we want to help however we can. We have plenty of ways to help, including support from our £40m Octo Assist fund.
FAQs
The price cap is set by Ofgem, the energy regulator. Despite the name, it does not limit your total bill and it does not apply to all tariffs. If you're on a "default" or "standard variable" tariff, it actually puts a cap on:
the maximum amount a supplier can charge you for each unit of gas and electricity you use
the daily standing charge (the fixed cost to connect your home to the grid).
Think of it like this: if there were a price cap for milk, it would limit the cost of each bottle, but if you bought more bottles, you’d still pay more. Read more on Ofgem's website.
But if it's just a unit cap, why do you hear figures like "£1,723 a year" on the news?
That figure is just an illustration. To get that number, Ofgem takes the capped unit prices and standing charges, and multiplies them by the exact number of units they estimate a "typical" household in an "average" part of the country uses in a year. Then that's the figure that gets reported everywhere.
To continue our milk analogy, if The Daily Moos reported that the price cap on milk had gone up from £70 to £80, it would just mean that Tesco was allowed to charge more for each bottle so the average family would spend more.
You can normally change tariffs on your online account.
Log in to your Octopus account
Click 'Change my tariff': it's one of the first options under your account balance.
There, you can compare your energy costs on your current tariff to our other available tariffs.
If you see an option you like, you'll be able to switch to it yourself online.
What if I can't see the option to move tariff?
You'll be able to see this option if you're on a variable tariff (like Flexible Octopus), or if you're on a fixed tariff and within 45 days of the end of your contract. If you have any questions or can't see the option, contact us for help.
The energy price cap changes every three months (four times a year). The upcoming dates you need to know are:
October 1st 2026: When the new rates take effect.
January 1st 2027: The next quarterly rate change.
Ofgem announces the new rates about five weeks before they kick in, giving you time to prepare or look for a fixed deal.
If you’re on a fixed smart tariff, nothing changes. If you’re on a variable version, we expect to increase your prices when the cap comes into effect.
The price cap doesn’t affect export rates, so we have no plans to change them. Just keep selling us those beams!
Published on
Nicki Slater-Arnold
Energy Writer