Person photographing a gas meter with a phone in a UK home to record the reading before a price change
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Energy Bills · Price Cap Forecast

Energy Price Cap January 2027: Forecast to Rise 16% to £1,999

The January to March 2027 price cap has not been set yet, but the latest forecasts put it between £1,999 and £2,085 a year for a typical home. Here is what is forecast, how much to trust it, and what it does to your bills.

Last updated: 7 October 2026

£1,999
Cornwall Insight forecast for January
+16%
On October's cap of £1,723
30.28p
Forecast electricity rate per kWh
25 November
Ofgem confirms the cap by this date

The energy price cap changes every three months, and the next change is on 1 January 2027. Ofgem will not confirm the figure until late November. Forecasters publish their estimates well before that, and the estimates for this winter have risen sharply in the past few weeks.

Quick answer: on 30 September, Cornwall Insight forecast a January to March 2027 price cap of £1,999 a year for a typical dual-fuel home paying by Direct Debit. That is £276, or 16%, above the current cap of £1,723. The average of the forecasts from EDF, British Gas and E.ON Next is higher, at £2,085, a rise of 21%. Gas is forecast to rise faster than electricity. These are forecasts, and Cornwall Insight's own figure moved by £127 in a single update. Ofgem will announce the real cap by 25 November 2026.

Smart meter display on a UK kitchen worktop on a winter morning, showing the cost of energy used so far today
The January cap sets the rate you pay for each unit. What you pay in total still depends on how much you use.

What the forecasts say

Cornwall Insight is the forecaster most often quoted. It models the cap using Ofgem's published method. Its latest forecast was published on 30 September 2026, using market prices up to 28 September.

Now: October to December 2026Forecast: January to March 2027Change
Typical annual bill£1,723£1,999+£276 (+16%)
Electricity, per kWh26.32p30.28p+3.96p (+15%)
Gas, per kWh7.97p9.76p+1.79p (+22%)
Electricity standing charge, per day54.83pAbout 55pLittle change
Gas standing charge, per day29.68pAbout 31pAbout +1p

The current column is Ofgem's confirmed cap. The forecast column is Cornwall Insight's. Both are for a home paying by Direct Debit, averaged across Great Britain. Your own rates vary by region and by how you pay.

Cornwall Insight is not the only forecaster, and it is currently the lowest of the ones we found:

ForecasterJanuary to March 2027Rise on the current capDate
Cornwall Insight£1,999+16%30 September
Average of EDF, British Gas and E.ON Next, as reported by MoneySavingExpert£2,085+21%Week of 28 September
EDF alone, as reported by IBTimes£2,165+26%27 September

What "typical" means now. Ofgem changed its definition of a typical home in July 2026, to 2,500 kWh of electricity and 9,500 kWh of gas a year. That is about 7% less electricity and 17% less gas than the old definition. Cap figures quoted before July 2026 are on the old basis and cannot be compared directly with these.

Why it is forecast to rise

The cause is the wholesale price of gas. Cornwall Insight says the rise is largely driven by the conflict in the Middle East, which is disrupting gas supplies to the UK and the rest of the world. It also points to gas storage in the EU, which was about 65% full in early September. That is the lowest level for the time of year in 15 years.

That is why the two fuels move differently. The gas unit rate is forecast to rise by about 22%, and electricity by about 15%. Electricity rises too because gas-fired power stations often set the wholesale electricity price in winter.

If the forecast is right, Cornwall Insight says it would be the largest single rise in the cap since January 2023.

How reliable is the forecast?

Treat it as a direction, not a number. Three things make the final figure uncertain.

The forecast has already moved a long way. Cornwall Insight's previous January forecast was £1,872, a 9% rise. The 30 September update lifted it to £1,999. That is £127 more in one revision.
The pricing window is still open. Ofgem sets the January cap from wholesale prices over a period that runs until mid-November. Cornwall Insight said on 30 September that the window was nearly halfway through. Prices in the second half count as much as the first.
The Budget is on 28 October. Government decisions can change bills separately from the cap. The current 0% VAT on electricity runs until 31 March 2027, so it already covers the whole January to March period. Cornwall Insight's release does not say how VAT is treated in its forecast rates.
The direction is not in doubt. Every forecast we found shows a double-digit rise in January. They differ on how large.

Ofgem has said it will announce the January to March cap by 25 November 2026. We will update this page when a new forecast is published and again when the cap is confirmed.

What it means for your bill

The cap limits the price of each unit and the daily standing charge. It does not limit your total bill, so what you pay depends on what you use. Spread evenly over a year, the typical bill would go from about £144 a month to about £167 on Cornwall Insight's forecast, or about £174 on the suppliers' average.

To estimate your own rise, take your annual use from a recent bill. On Cornwall Insight's forecast rates, each kWh of electricity costs 3.96p more and each kWh of gas costs 1.79p more.

HomeElectricity a yearGas a yearExtra cost a year at the forecast rates
Electric-only flat2,000 kWhNoneAbout £82
Typical home, as Ofgem defines it2,500 kWh9,500 kWhAbout £276
Larger gas-heated house3,500 kWh15,000 kWhAbout £410

These are annual figures, worked out as if January's forecast rates lasted a full year. The cap is reset again in April. January to March is also when most homes use the most gas, so the rise will show up more in winter bills than an even monthly split suggests.

What appliances would cost to run at 30.28p

Every running cost on this site is worked out at the current electricity rate of 26.32p per kWh. Here is what the same appliances would cost at Cornwall Insight's forecast rate of 30.28p.

ApplianceElectricity usedNow, at 26.32pJanuary forecast, at 30.28p
2kW fan heater2 kWh an hour53p an hour61p an hour
Heated clothes airer, 300W0.3 kWh an hourAbout 8p an hourAbout 9p an hour
Heated airer, small loadAbout 1.4 kWhAbout 37pAbout 42p
Vented or condenser tumble dryer, one loadAbout 2.5 kWhAbout 66pAbout 76p
Heat pump tumble dryer, one load1 to 1.5 kWh26p to 39p30p to 45p
Dehumidifier, 151W to 355W0.15 to 0.36 kWh an hour4p to 9p an hour5p to 11p an hour
Dehumidifier, 8 hours a day for a month36 to 85 kWh£10 to £22£11 to £26

The order does not change: a cheap appliance stays cheap and an expensive one stays expensive. What changes is the size of the gap. Drying a load on a heated airer instead of in a condenser tumble dryer saves about 29p now and about 33p at the forecast rate. Our guide to dehumidifiers against tumble dryers has the full comparison.

Gas is rising faster than electricity: what that changes

Because gas is forecast to rise by more than electricity, the gap between the two narrows. Electricity costs 3.3 times as much as gas per kWh today. On the January forecast it would cost 3.1 times as much.

That matters for heat pumps, which use electricity to do a job a boiler does with gas. Assume a gas boiler that turns 85% of its gas into heat. At today's rates, a heat pump has to deliver about 2.8 units of heat for each unit of electricity to match that boiler's cost per unit of heat. At the forecast January rates the figure falls to about 2.6. This compares unit rates only and leaves out standing charges and installation costs. Our heat pump running costs for 2027 guide goes through it in detail.

The same change makes home-generated electricity worth more. Each kWh of solar power you use yourself would save 30.28p instead of 26.32p. If you are weighing up solar panels, a home battery or a plug-in solar kit, rerun the payback at the higher rate, but remember the cap is reset every three months.

What you can do before January

Person photographing a gas meter with a phone in a UK home to record the reading before a price change
If you do not have a smart meter, a dated photo of each meter on 31 December stops usage being billed at the wrong rate.
1
Compare fixed tariffs against the forecasts
A fixed tariff is not covered by the cap, so its price does not change in January. On 2 October, MoneySavingExpert listed 12-month fixes up to 4.8% below the current cap, which is about £1,640 a year at typical use, with exit fees of £50 per fuel. The suppliers' average forecast for the cap is above today's level in every quarter to September 2027: £2,085 from January, £2,061 from April and £1,876 from July. Forecasts can be wrong in either direction, and we are not financial advisers. Check the exit fees and the unit rates for your own region before you sign.
2
Check whether you qualify for free insulation
The ECO4 scheme, which pays for insulation and heating upgrades in eligible homes, closes on 31 December 2026. Our ECO4 eligibility checker takes two minutes.
3
Do the free and cheap fixes first
Turning down a combi boiler's flow temperature, draught-proofing and radiator controls cut gas use, and gas is where most of this rise falls. The Energy Efficiency Bundle lists them in order of cost.
4
Look at a time-of-use tariff if you can shift your use
If you have a smart meter and can run appliances or charge a car or battery off-peak, a smart tariff can cost less than the cap rate. We compare the main ones in Octopus tariffs compared.
5
Change how you dry washing
Electric drying is one of the larger discretionary costs in winter. A heated airer or a dehumidifier with an unheated rack uses less electricity per load than a vented or condenser tumble dryer.
6
Take meter readings on 31 December
If you do not have a smart meter, send your supplier a reading for each fuel on 31 December or 1 January, and keep a dated photo. That stops energy you used in December being billed at January's rate.
7
Ask for help early if you will struggle to pay
Suppliers must offer payment plans to customers in difficulty. Contact yours before you fall behind, and ask what support you qualify for, including the Warm Home Discount.

Key dates

DateWhat happens
28 October 2026Autumn Budget. Any change to energy bill support would be announced here.
Mid-November 2026The wholesale pricing window for the January cap closes.
By 25 November 2026Ofgem announces the January to March 2027 price cap.
31 December 2026ECO4 closes. Take meter readings if you do not have a smart meter.
1 January 2027The new cap takes effect.
31 March 2027The 0% VAT rate on domestic electricity is due to end.
1 April 2027The cap is reset again for April to June.

Frequently asked questions

What is the energy price cap forecast for January 2027?

Cornwall Insight's forecast of 30 September 2026 is £1,999 a year for a typical dual-fuel home paying by Direct Debit, which is 16% above the current cap of £1,723. The average of the forecasts from EDF, British Gas and E.ON Next is £2,085, a 21% rise. Ofgem has not confirmed the cap yet.

When will Ofgem announce the January 2027 price cap?

Ofgem has said it will announce the cap for 1 January to 31 March 2027 by 25 November 2026.

Will energy prices go up in January 2027?

Every forecast we found shows a rise of 16% or more for homes on a standard variable tariff, because wholesale gas prices have risen. The size of the rise is uncertain until Ofgem confirms it. Fixed tariffs are not affected until the fix ends.

How much will electricity cost per kWh in January 2027?

Cornwall Insight forecasts an average electricity unit rate of 30.28p per kWh for January to March 2027, up from 26.32p now. Its forecast gas rate is 9.76p per kWh, up from 7.97p. Rates vary by region and payment method.

Why is the energy price cap going up?

Wholesale gas prices have risen. Cornwall Insight attributes this mainly to the conflict in the Middle East disrupting gas supplies, and to low gas storage levels in Europe. Gas-fired power stations often set the wholesale price of electricity in winter, so both fuels rise.

Should I fix my energy tariff before January?

That depends on the fix on offer and your own circumstances, and we are not financial advisers. As a guide to the facts: on 2 October MoneySavingExpert listed 12-month fixes up to 4.8% below the current cap, with exit fees of £50 per fuel, and the suppliers' average forecast puts the cap above today's level in every quarter to September 2027. Forecasts can be wrong.

Does the price cap limit my total bill?

No. The cap limits the unit rate and the daily standing charge on standard variable and default tariffs. If you use more energy, you pay more. The headline annual figure is only an example for a home with typical use.

Will the price cap fall again in April 2027?

Possibly, but not by much on current forecasts. The average of the EDF, British Gas and E.ON Next forecasts is £2,061 from April 2027, about 1% lower than their January figure, and £1,876 from July. Forecasts that far ahead are much less reliable.

Cut the bill before the rise arrives

Start with the changes that cost little or nothing, in order of what they save.

See the Energy Efficiency Bundle →

Published 7 October 2026. Current cap rates are from Ofgem's price cap notice for 1 October to 31 December 2026. The January forecast is from Cornwall Insight's release of 30 September 2026. Supplier forecasts and fixed tariff figures are as reported by MoneySavingExpert on 2 October 2026, and EDF's forecast as reported by IBTimes on 27 September 2026. Appliance costs are the energy used multiplied by the unit rate. Heat pump figures assume an 85% efficient gas boiler and compare unit rates only. This page is information, not financial advice.

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