Why the October 2026 price cap hits gas homes most
The price cap rises 4% on 1st October 2026, but the increase is not spread evenly. Gas bills go up 8% while electricity stays broadly flat, which means homes without gas see less than 1% increase. Here is why, and what it means for your heating.
If you have seen the headlines this morning, the short version is that the price cap goes up by 4% on 1 October. Taking a typical household bill from £1,663 to £1,723 a year. That works out at around £5 a month. Almost all of the increase falls on gas, and homes that do not use gas at all will see their bill go up by less than 1%.
What is changing on 1 October?
Gas bills are going up by 8%, and electricity bills are staying close to where they are now.
The price cap is really two caps, one for gas and one for electricity, each with its own unit rate and standing charge. The £1,723 figure is just those two applied to the energy use of a typical household and added together, so the two halves can move in different directions, which is exactly what has happened here.
Why are gas bills rising?
Wholesale gas prices have gone up by 11% over the past three months, largely because of the conflict in the Middle East.
Gas is bought and sold on international markets. So when something happens abroad that affects supply, prices move, and a few months later it shows up on bills here. It is a frustrating position to be in as a household, because there is very little you can do about it. And it is the same story behind every price cap announcement since 2022.
Why are electricity bills staying flat?
There are two reasons. The first is that wholesale costs make up a smaller share of an electricity bill than they do of a gas bill, because electricity carries more of the network and policy costs. When wholesale prices rise, the effect on the electricity side is therefore more diluted.
The second is that the Government has removed VAT from domestic electricity. This comes off the whole bill rather than one part of it, and that has cancelled out most of what was left. Without it, the cap would have been around £45 higher.
What does this mean if you have a heat pump?
A home running on electricity alone is looking at an increase of under 1%, rather than the 8% that gas households face.
Gas bills follow international markets every single quarter. Electricity is affected too, since gas power stations often set the wholesale electricity price. So it would be wrong to say heat pump owners are completely insulated. They are simply much less exposed, and that difference shows up every time the cap changes. Coming off gas altogether also means no gas standing charge, which you pay whether you use any gas or not.
That gap is expected to widen. The Government announced measures in April 2026 aimed at reducing how much of our electricity price is set by gas, with contracts due to be allocated from 2027. It is a gradual shift rather than a clean break, but the direction of travel favours homes that have already moved away from gas.
What can you do about it?
If you are worried about affording your bills, please speak to your supplier first. They can set up an affordable repayment plan and point you towards financial support. The earlier you get in touch the more options you tend to have.
If you are on a standard variable tariff, it is worth looking at what fixed deals are available, as some sit below the cap. Payment method makes a difference too, with prepayment customers paying the lowest cap rates.
Could you heat your home without gas?
For something longer lasting, a heat pump assessment will tell you what coming off gas would actually involve for your home and what it would cost. It aims to give you the confidence to make a decision on whether a heat pump is right for you.
Retrofit West also offer free, impartial advice to homeowners across Bristol, Bath and North East Somerset, and South Gloucestershire.
How much is the energy price cap from October 2026?
It is £1,723 a year for a typical household paying by direct debit for gas and electricity, up from £1,663. The cap limits unit rates and standing charges rather than your total bill, so what you actually pay comes down to how much energy you use.
Why is my electricity bill not going up much
The Government has removed VAT from domestic electricity bills, which has offset almost all of the underlying increase. Electricity bills also carry a smaller share of wholesale costs than gas bills do, so rises in the gas market affect them less.
Will a heat pump save me money under the new cap?
Homes without gas see an increase of under 1% from October, compared with 8% for gas. Whether a heat pump lowers your bill overall depends on how well insulated your home is and how carefully the system is designed and installed, which is exactly what an assessment is for.l
Learn more hereDoes the price cap apply if I am on a fixed tariff?
No. Around 11 million households are on fixed tariffs and will not be affected by this change. The VAT removal on electricity does still apply, and suppliers should be applying it automatically.
When does the price cap change next?
It is updated every three months, so the next change takes effect on 1 January 2027
Heat Pump Assessment
A heat pump assessment tells you how a heat pump would work in your home. It will advise… Read more »
Read more
