Published: 10 November 2026
Household energy bills are set to rise again in January. Ofgem will announce the price cap for January to March 2027 on 25 November, and forecasts point to a sharp increase, even after Budget measures aimed at easing the pressure. This guide explains where the cap stands, why it is rising, what help the Budget offers and what you can do now.
Where the price cap stands
The October to December cap rose by 3.6% to £1,723 a year for a typical household, according to PA and Evening Standard reporting after the Budget. In late September, consultancy Cornwall Insight forecast a further 16% rise to about £1,999 a year for a typical dual-fuel customer paying by direct debit in January. More recent reports cite forecasts closer to 22%.
Forecasts differ because they depend on wholesale prices during the period Ofgem uses to set the cap. They are not final figures, and “typical” is a benchmark: your own bill depends on how much energy you use.
Why bills are going up
The Associated Press reported that the Iran war has caused an energy price spike, and that the Chancellor, John Healey, said the war was not something the government wanted. Bottlenecks in the Strait of Hormuz have squeezed global oil and gas supplies, and analysts have also pointed to lower gas stocks going into winter. A campaigner from the End Fuel Poverty Coalition said wholesale gas prices have tripled since February, which is a claim worth checking against official wholesale data. The same pressures sit behind the Bank of England’s decision to raise rates, which we explain in our guide to what the rise to 4% means for mortgages, savings and prices.
What the Budget offers
- A £100 payment for around 20 million households in council tax bands A to D, costing £2.6 billion and paid directly into bank accounts.
- The VAT cut on electricity bills extended to July.
- Gas standing charges to be moved onto unit rates in 2027 or as soon as possible after, with similar reforms to follow for electricity.
Reaction and trade-offs
Campaigners said the £100 payment would barely dent the January rise. Citizens Advice welcomed the extra help but said significant gaps remain and warned that moving standing charges into unit prices could hurt low-income households with high heating needs. Cornwall Insight said the savings from the standing charge change would be small and unlikely to ease costs this winter. Uswitch gave an example: a household using 7,000 kWh of gas a year could be about £40 better off, a typical 11,500 kWh household should see no change, and one using 14,000 kWh could be about £25 worse off.
What households can do now
These are general suggestions, not official advice. Check official government pages for how and when the £100 payment will be made. Keep meter readings up to date so your bill reflects what you actually use. If you are struggling to pay, speak to your supplier early about payment plans and support, and consider free independent advice from organisations such as Citizens Advice. Wait for the 25 November announcement before making major decisions based on forecasts.
What to watch
The official cap on 25 November will show how far the forecasts hold. The Bank of England expects inflation to reach around 5% by mid-2027, largely because of energy, so developments in the Middle East matter for bills. We cover the political side in the Iran war and Britain and what the US midterm results could mean for Britain, and you can follow money news in our Business section.
Quick answers
When is the next price cap announced? Ofgem announces the January to March 2027 cap on 25 November.
How much will bills rise? Forecasts range from about 16% to 22%, but the final figure is set by Ofgem.
Who gets the £100 payment? Around 20 million households in council tax bands A to D, according to the Budget announcement.
