Energy Price Cap January 2027: Forecasts £1,999 to £2,185

Last Updated on October 20, 2026

Ofgem has not set the energy price cap for January 2027 yet, but almost every forecaster expects a big rise. The cap is £1,723 a year for a typical household until 31 December, and Ofgem must confirm the next level by 25 November 2026. Forecasts published up to 20 October put it between £1,999 and £2,185.

Here are the forecasts and the dates, with the sums worked through, so you can see what the energy price cap January 2027 rise could cost your household. We’ll update this page when Ofgem publishes the confirmed figure.

Quick answer: Ofgem has not yet set the January 2027 cap, which it must announce by 25 November 2026. As of 20 October, forecasts put the typical dual-fuel bill at £1,999 to £2,185 a year, up from £1,723. The average of British Gas, EDF and E.ON Next is £2,154, a rise of about 25%.

Contents

0.1 Key takeaways

1 What is the energy price cap January 2027 forecast?
2 Why is the price cap going up in January?
3 When will Ofgem announce the January 2027 price cap?
4 How much will the January price cap rise cost me?
5 How does a January rise compare with past price cap rises?
6 How accurate are price cap forecasts?
7 Will the VAT cut on electricity still apply in January?
8 What can you do before the January price cap?
9 FAQs
10 Our Verdict
11 Sources

Key takeaways

The cap is £1,723 a year until 31 December 2026. The January 2027 cap covers 1 January to 31 March 2027.
Forecasts range from £1,999 (Cornwall Insight, +16%) to £2,185 (British Gas, +26.8%). That is £23 to £38.50 more a month for a typical household.
Gas is the main driver. UK wholesale gas reached about 222p a therm on 20 October, up around 22% in a month.
The 0% VAT on domestic electricity runs to 31 March 2027, so it covers the whole January cap period.

What is the energy price cap January 2027 forecast?

Nobody outside Ofgem knows the number yet. What we have are forecasts from an energy consultancy and from suppliers who model the cap.

This table shows the forecasts reported as of 20 October 2026, set against the current £1,723 cap.

Forecaster	Forecast date	January 2027 cap	Rise	Extra per month
Cornwall Insight	30 Sep 2026	£1,999	+16.0%	£23.00
OVO	7 Oct 2026	£2,074	+20.4%	£29.25
E.ON Next	12 Oct 2026	£2,130	+23.6%	£33.92
EDF	13 Oct 2026	£2,148	+24.7%	£35.42
British Gas, EDF and E.ON Next average	15 Oct 2026	£2,154	+25.0%	£35.92
British Gas	15 Oct 2026	£2,185	+26.8%	£38.50

Figures are for a typical dual-fuel household paying by Direct Debit. Sources include MoneySavingExpert, EnergySwitch and Cornwall Insight’s forecast. Percentages and monthly increases are calculated from the current cap.

The spread looks wide because the forecasts were made on different days.

Cornwall Insight’s £1,999 estimate was published on 30 September, using wholesale prices from 28 September. The supplier figures are one to two weeks newer.

Gas prices have risen since then, which is the most likely reason the supplier forecasts sit higher.

Cornwall Insight has described a January rise as all but certain, because September’s price increases are already locked into the period Ofgem uses to set the cap.

Uswitch, which averages supplier forecasts, reported on 19 October that the average prediction was a 25% rise, although the exact size remains uncertain.

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Why is the price cap going up in January?

Wholesale gas is behind the energy price cap January 2027 forecasts.

Cornwall Insight points to the Middle East conflict disrupting gas supply.

Ofgem’s July price cap letter reported that the conflict beginning in late February pushed its gas wholesale allowance up 50%.

Its October letter added another 13%.

Wholesale costs now account for 47% of the cap, up from 44% in July to September.

Gas also influences the price of electricity, so a gas price spike can increase the cost of both fuels.

Trading Economics put UK wholesale gas at approximately 222p per therm on 20 October 2026, around 22% higher than a month earlier.

Its 14 October report described prices as the highest since late 2022, with disruption to Gulf shipping through the Strait of Hormuz and European gas storage at approximately 74% capacity.

One factor is pulling in the opposite direction.

The government reduced VAT on domestic electricity from 5% to 0% on 1 October. Cornwall Insight’s forecast still shows a rise despite that reduction.

Without the VAT cut, a typical electricity bill would be approximately £43 higher, based on the figures in this article.

When will Ofgem announce the January 2027 price cap?

Ofgem will announce the January 2027 energy price cap on or before 25 November 2026.

The new cap takes effect on 1 January 2027 and applies until 31 March.

Ofgem can publish the figure earlier if necessary. For comparison, it announced the January 2026 cap on 21 November 2025.

According to Uswitch, the wholesale price observation window runs from 19 August to 17 November 2026.

By 20 October, 63 of those 91 days had passed, approximately 69%.

That leaves around four weeks of wholesale prices to influence the final calculation, which explains why forecasts can still change.

For the full schedule, see our guide to the next energy price cap announcement.

How much will the January price cap rise cost me?

Your bill is not automatically equal to the headline price cap.

The cap limits the unit rates and daily standing charges suppliers can charge customers on applicable default tariffs. Your actual bill depends on how much electricity and gas you use.

Ofgem’s typical household consumption figures are 2,500 kWh of electricity and 9,500 kWh of gas per year.

Using the current rates of 26.32p per kWh for electricity and 7.97p per kWh for gas, alongside the applicable standing charges, that typical household pays approximately £858 for electricity and £865 for gas.

Cornwall Insight’s £1,999 forecast breaks down into approximately £959 for electricity and £1,040 for gas, according to figures reported by Energy Made Easy.

Typical household	Oct–Dec 2026	January forecast	Increase
Electricity	£858	£959	+£101
Gas	£865	£1,040	+£175
Total	£1,723	£1,999	+£276

Gas accounts for almost two-thirds of the projected increase in this example.

Homes relying heavily on gas heating may therefore feel the rise particularly strongly.

Households that generate some of their own electricity can reduce their exposure to grid electricity prices, although they remain exposed to gas prices if they use a gas boiler.

Our guide to heat pump running costs explains how electric heating compares.

How does a January rise compare with past price cap rises?

Cornwall Insight’s forecast increase of 16% would represent the largest quarterly rise since January 2023, when the cap increased by 21%.

EDF’s forecast of 24.7% and British Gas’s estimate of 26.8% would exceed that increase.

Those figures would make January 2027 the biggest quarterly rise since October 2022, when the cap increased by 80%.

Our guide to the history of the UK energy price cap covers the changes quarter by quarter.

The difference this time is the starting point.

In 2022, the government’s Energy Price Guarantee limited the typical annual household bill to £2,500.

No equivalent scheme has been announced for January 2027. The electricity VAT reduction is already reflected in the current figures, and any further support would depend on government decisions.

How accurate are price cap forecasts?

Forecasts tend to become more accurate as Ofgem approaches its announcement date.

One week before the August 2026 announcement, Uswitch reported these supplier forecasts for the October cap:

British Gas: £1,730
EDF: £1,721
E.ON Next: £1,725

Ofgem subsequently announced £1,723.

Earlier forecasts can change much more substantially.

EDF’s January 2027 estimate was £2,165 in mid-September, fell to £2,083 in early October and moved back to £2,148 on 13 October.

The important point is that the January forecasts remain estimates until Ofgem confirms the actual rates.

Will the VAT cut on electricity still apply in January?

Yes, under the policy announced as of 20 October 2026.

GOV.UK announced that VAT on domestic electricity would fall from 5% to 0% from 1 October 2026.

The reduction is scheduled to remain in place until 31 March 2027, covering the entire January to March price cap period.

Gas remains subject to 5% VAT.

Suppliers are also expected to pass the electricity VAT reduction on to customers with fixed tariffs.

What happens after 31 March has not yet been confirmed.

If the standard 5% VAT rate returns in April, a typical annual electricity bill of £858 would increase by approximately £43, assuming all other costs remained unchanged.

What can you do before the January price cap?

You cannot control the wholesale market or Ofgem’s price cap, but you can reduce how much energy you buy at those rates.

Check whether you are on a fixed tariff

The price cap affects applicable default tariffs, not the unit rates of a fixed deal during its agreed term.

Compare available fixed tariffs with the current cap and January forecasts.

Our guide to whether you should fix or wait before the January price cap explains the decision.

Reduce your gas consumption

Because gas is driving much of the forecast increase, reducing heating demand can make a meaningful difference.

See our guide to reducing your gas bill for practical ways to cut consumption.

Reduce electricity waste

Small changes to appliance use and household energy habits can help reduce electricity consumption.

Our guide to saving on your electricity bill covers the main opportunities.

Generate electricity with solar panels

Every kilowatt-hour of solar electricity you generate and use directly reduces the amount you need to purchase from the grid.

At the current electricity unit rate of 26.32p, using 1,000 kWh of your own solar generation instead of buying it from the grid would avoid approximately £263 in electricity unit charges.

At Cornwall Insight’s forecast rate of around 30.3p per kWh, the same amount of self-consumption would avoid approximately £303.

Those are illustrative gross savings before accounting for installation costs, system performance or potential export revenue.

Read our guides to whether solar panels are worth it, solar panel payback periods and average monthly electricity bills with solar.

Check the Warm Home Discount

The Warm Home Discount Scheme provides eligible households with a one-off £150 reduction on their electricity bill.

Eligible households usually receive the discount automatically, although the eligibility rules depend on their circumstances and location.

If rising electricity prices are making you consider solar panels, an installation quote can help establish what a suitable system could generate and save at your property.

Get A Solar Quote

FAQs

What will the energy price cap be in January 2027?

Ofgem has not announced it yet and must do so by 25 November 2026.

As of 20 October, forecasts range from £1,999 (Cornwall Insight) to £2,185 (British Gas) for a typical household, against £1,723 currently.

The average of British Gas, EDF and E.ON Next is £2,154, representing an increase of approximately 25%.

When is the January 2027 price cap announced?

Ofgem will announce the January to March 2027 cap on or before 25 November 2026.

The new cap begins on 1 January 2027.

Wholesale prices from 19 August to 17 November 2026 contribute to the calculation.

Will energy bills go up in January 2027?

Current forecasts strongly suggest an increase for customers on default tariffs.

Cornwall Insight expects a rise, and the forecasts reviewed for this article range from 16% to 26.8%.

Customers on fixed tariffs generally retain their agreed unit rates until their deal ends.

What is the current energy price cap?

The current cap is £1,723 a year for a typical dual-fuel household paying by Direct Debit, covering 1 October to 31 December 2026.

The electricity unit rate is 26.32p per kWh with a 54.83p daily standing charge.

Gas costs 7.97p per kWh with a 29.68p daily standing charge.

Actual bills depend on consumption, payment method and region.

Is the VAT cut on electricity ending before January?

No.

The announced 0% VAT rate for domestic electricity runs from 1 October 2026 to 31 March 2027.

It therefore applies throughout the January to March price cap period.

Gas remains subject to 5% VAT.

How accurate are January price cap forecasts?

Forecasts made shortly before an announcement can be accurate.

For the October 2026 cap, supplier forecasts published a week beforehand were close to Ofgem’s confirmed £1,723 figure.

January forecasts remain less certain because wholesale prices continue to influence the calculation until 17 November.

Should I fix my energy before the January price cap?

A fixed tariff is worth comparing if you currently pay default tariff rates.

The January forecasts are considerably higher than today’s cap, but available fixed deals can change as wholesale prices move.

Compare your actual annual consumption, unit rates, standing charges, contract length and exit fees before deciding.

Our Verdict

The January 2027 energy price cap has not been confirmed, but the available forecasts point towards a substantial increase.

The average of British Gas, EDF and E.ON Next predictions is approximately £2,154 a year for a typical household, around £36 a month more than the current cap.

Cornwall Insight’s £1,999 forecast represents the lower end of the published estimates, while British Gas’s £2,185 estimate sits at the higher end.

With wholesale gas prices remaining volatile and the observation window open until 17 November, those figures could still change.

If you are on a default tariff, compare fixed deals before the November announcement rather than assuming the current rates will continue.

Longer term, reducing energy consumption and generating some of your own electricity can reduce your exposure to future price increases.

We’ll update this article when Ofgem announces the confirmed January 2027 cap.

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Sources

All sources listed in the supplied draft were accessed on 20 October 2026.