Get aheadHousehold bills
Energy bills are forecast to rise in January. Here is how to weigh up a fixed tariff
Forecasters expect Ofgem's price cap to jump from January 2027. A fix could shield you from that, but today's cheapest fixes cost a little more than the current cap and come with exit fees.
Published 25 October 2026Last checked 25 October 2026England, Scotland, WalesFrom Ofgem
Illustration generated with AI
What's happening
From October to December 2026, Ofgem's price cap works out at £1,723 a year for a typical home paying by direct debit. Named forecasters expect the January to March 2027 cap to rise to somewhere between about £1,999 and £2,185. Fixing your tariff could protect you from that rise, but the cheapest fixes cost slightly more than today's cap and most charge a fee if you leave early.
The question: Could fixing my gas and electricity price now save money if the price cap rises in January 2027?
The move
Compare one-year fixed tariffs now and consider fixing if a fix costs less than the forecast January cap for your own use.
Why now
Named forecasters expect the cap to rise from 1 January 2027. Ofgem confirms the level on 25 November, and fix prices on offer can change before then.
If it doesn't happen
You stay on the capped tariff. Your unit prices follow the cap each quarter, up or down.
Suits
- People who prefer predictable unit prices through the winter
- Households that use a lot of gas for heating
- People already near the end of a fix who would otherwise roll onto the variable tariff
Doesn't suit
- People who expect to move home and would pay exit fees
- Anyone who would rather take the chance that prices fall
- Households in Northern Ireland
Forecast. Cornwall Insight forecast £1,999 for January to March 2027 on 30 September. More recent supplier forecasts range from £2,161 (OVO, 20 October) to £2,185 (British Gas, 15 October), with E.ON Next at £2,166 (19 October). Ofgem sets the actual cap on 25 November.
This applies to you if…
- You live in England, Scotland or Wales
- You are on your supplier's standard variable tariff, which is the one the price cap covers
- You would rather know your unit prices for the next year than gamble on where the cap goes
- You can find your yearly energy use in kWh on a bill or in your supplier's app
Not for you if…
- Households in Northern Ireland, where Ofgem's cap does not apply
- People already on a fix that has more than 49 days left, unless the saving beats the exit fee
- Anyone who expects to move home soon and would face exit fees
- People who would rather pay the cap and take the chance that prices fall
What it's worth
Compares a fix priced 5.8% above the October cap with forecasts for the January cap. Typical use, dual fuel, direct debit, England, Scotland and Wales.
Tax year Price cap period 1 January to 31 March 2027 (forecast)
Illustrative calc: a fix against the forecast January cap
- October to December cap: £1,723 a year for typical use (Ofgem).
- MoneySavingExpert's cheapest one-year fixes on 21 October were 5.8% above that cap. £1,723 plus 5.8% is about £1,823 a year.
- Forecasts for January to March: £1,999 (Cornwall Insight, 30 September) up to £2,185 (British Gas, 15 October).
- The gap between the fix and the forecasts is about £176 to £362 a year, written as a yearly rate.
- January to March is a quarter of a year. A quarter of that gap is about £44 to £90.
About £45 to £90 less over January to March, if the forecasts turn out right
Illustrative only. Homes use more energy in winter than in an average quarter, the cap after March is unknown, and your own use, region and payment method change the numbers. During October to December, a fix priced above the cap costs you a little more.
How to do it
- 1
Find your tariff details
Look on a recent bill or your supplier's app for your tariff name, whether it is fixed or variable, any end date, and your yearly use in kWh.
Takes about 5 minutes
- 2
If you are already on a fix, look for the exit fee. With 49 days or fewer left you can switch without paying it.
Takes about 5 minutes
- 3
Compare fixes using your own use
Use more than one comparison site and check your current supplier's own fixes too. Enter your real kWh figures rather than the typical ones.
Takes about 15 minutes
- 4
Weigh the yearly cost against the cap
Compare the fix's yearly cost with the current cap and with the forecasts. Note the length of the fix and the exit fee per fuel.
Takes about 10 minutes
- 5
Switch, then take a meter reading
You have 14 days to cancel after agreeing a new contract. Submit a meter reading on the switch date so your old and new bills are accurate.
Deadline
Ofgem announces the January to March 2027 cap — 25 November 2026 (in 31 days)
This is not a deadline to act. Fix prices can change at any time, so a price you see today may not be there later.
The catches
Today's fixes cost more than today's cap
MoneySavingExpert found the cheapest one-year fixes on 21 October were 5.8% above the October cap. Until the end of December you would pay a little more than on the capped tariff.
Forecasts can be wrong
If wholesale prices fall before Ofgem sets the January cap, the cap could come in lower than forecast. A fix would then cost you more than staying put.
Exit fees
The cheapest fixes in MoneySavingExpert's 21 October table charged £50 per fuel to leave early, so £100 for gas and electricity together.
The cap is a price limit, not a bill limit
Ofgem's cap limits the unit rate and standing charge. If you use more energy, your bill goes up whatever tariff you are on.
Prepayment, Economy 7 and regional prices differ
The £1,723 figure is for typical dual fuel use paid by direct debit. Your own figures will depend on your meter, region and payment method.
Illustrative example
Illustrative example: a flat on the price cap
Sam rents a flat in Leeds, pays by direct debit and is on the standard variable tariff. Sam's bills show typical use.
- On the cap, Sam pays at a yearly rate of £1,723 until the end of December.
- A fix 5.8% above the cap would cost Sam at a yearly rate of about £1,823 from the day it starts.
- If the January cap lands at £1,999, the fix saves Sam about £176 at a yearly rate, roughly £44 over January to March.
- If the cap lands at £2,185, the saving is about £362 at a yearly rate, roughly £90 over the three months.
- If the cap stays near £1,723, the fix costs Sam about £100 more over a year.
Fixing pays off for Sam only if the cap rises by more than about 6% and stays higher for long enough.
Illustrative only, using typical use and published forecasts. Real bills depend on how much energy you use and when.
What this means for…
- Renting: If the energy account is in your name, you can usually choose your tariff. Check your tenancy agreement if bills are included in rent.
- Get benefits: If you get a means-tested benefit, you may also qualify for the Warm Home Discount, whatever tariff you choose.
Common misreadings
You might hear: The price cap limits how much my whole bill can be.
Actually: It limits the price per unit and the daily standing charge. Your bill still rises if you use more energy.
You might hear: January's rise is already decided.
Actually: Ofgem sets the cap on 25 November 2026. The figures so far are forecasts from named firms, and they differ from each other.
You might hear: If I fix, I am locked in whatever happens.
Actually: You can leave a fix early by paying the exit fee. With 49 days or fewer left, you can switch without one.
Where the UK nations differ
- England, Scotland and Wales
- Ofgem's price cap applies. Cap figures are averages across the three nations, and regional prices vary.
- Northern Ireland
- Ofgem's cap does not apply. Prices are set by suppliers in Northern Ireland's separate energy market, so check your own supplier's tariffs.
What you could do
are on a standard variable tariff and would value price certainty this winter
By 2026-11-25
are on a fix that ends in the next 49 days
are worried about paying higher bills this winter
Timeline
1 October 2026
October to December cap starts
£1,723 a year for typical use, up 4%.
25 November 2026
Ofgem announces the January to March 2027 cap
1 January 2027
New cap level takes effect
Forecasts point to a rise. The actual level is not yet set.
23 February 2027
Ofgem announces the April to June 2027 cap
31 March 2027
Temporary removal of VAT on household electricity ends
Gas still has 5% VAT.
The detail
The rules
- The price cap sets the most a supplier can charge per unit of energy and per day in standing charges on a standard variable tariff. It does not limit your total bill.
- The cap does not apply to fixed tariffs.
- Ofgem's typical household figures assume 2,500 kWh of electricity and 9,500 kWh of gas a year. These replaced older, higher figures from 1 July 2026, so older cap figures are not directly comparable.
- October to December 2026 averages for direct debit: electricity 26.32p per kWh and 54.83p a day; gas 7.97p per kWh and 29.68p a day.
- There is no VAT on household electricity from 1 October 2026 to 31 March 2027. Gas has 5% VAT.
- Ofgem's ban on acquisition-only tariffs means suppliers cannot keep their cheaper deals for new customers only. It runs until 31 March 2027, and Ofgem has consulted on extending it to March 2028.
References
- Ofgem press release, 26 August 2026: Cap rises 4% to £1,723 from 1 October. About 35% of households, around 11 million, are on fixed tariffs.
- Cornwall Insight, 30 September 2026: Forecasts £1,999 for January to March 2027, up 16%.
- Citizens Advice, switching supplier: No exit fee with 49 days or fewer left on a fix. 14-day cooling-off period.
Documents
- Changes to energy price cap between 1 October and 31 December 2026 — Unit rates, standing charges and future announcement dates
- Energy price cap explained
- Summary of changes, 1 July to 30 September 2026 (revised typical use)
Words explained
- Price cap
- The highest price per unit and per day a supplier can charge on its standard variable tariff in England, Scotland and Wales.
- Standard variable tariff
- Your supplier's default deal. Its prices move with the cap every three months.
- Fixed tariff
- A deal where your unit price and standing charge stay the same for a set time, often 12 months.
- Exit fee
- A charge for leaving a fixed deal early, usually set per fuel.
- Standing charge
- A daily charge you pay however much energy you use.
- Unit rate
- The price you pay for each kilowatt hour (kWh) of energy.
In short
The price cap is £1,723 a year for a typical home until December. Forecasters expect it to rise to around £2,000 to £2,185 from January, but Ofgem only confirms it on 25 November. Today's cheapest fixes cost a bit more than the current cap, so a fix pays off only if the cap rises by more than that.
Related dates
- 25 Nov Ofgem announces the January to March 2027 price capAnnouncement · in 31 days
- 1 Jan New energy price cap takes effectChange · in 68 days
- 23 Feb Ofgem announces the April to June 2027 price capAnnouncement · in 121 days
- 31 Mar Temporary removal of VAT on household electricity endsChange · in 157 days
Sources
- Energy price cap will rise by 4% from October 2026, Ofgem (2026-08-26)
- Changes to energy price cap between 1 October and 31 December 2026, Ofgem (2026-08-26)
- Energy price cap, Ofgem
- Renewal of the ban on acquisition-only tariffs after March 2027, Ofgem
- 16% price cap rise forecast in January, Cornwall Insight (2026-09-30)
- Price cap predictions, British Gas (2026-10-15)
- Price cap predictions, E.ON Next (2026-10-19)
- Price cap forecast, OVO (2026-10-20)
- Switching energy supplier, Citizens Advice
- Are there any cheap fixed energy deals worth it?, MoneySavingExpert (2026-10-21)
This is guidance, not regulated financial advice. Check figures against the linked official source before you act. Written with AI assistance and checked against primary sources. How Kitty works. For free, impartial help, try MoneyHelper or Citizens Advice.