What will the energy price cap be in January 2027?

The January 2027 cap has not yet been announced by Ofgem. Based on wholesale energy market forecasts in early 2026, analysts expect the cap for Q1 2027 to be in the range of £1,700–£1,900 per year for a typical dual-fuel household paying by direct debit. This is an estimate — the actual figure depends on wholesale gas and electricity prices in the months leading up to the announcement, which Ofgem typically makes in late November.

Should I fix my energy tariff or stay on the price cap?

It depends on where wholesale prices are heading. If fixed deals are available below the expected future price cap, fixing locks in that rate and protects you from increases. If fixed deals are higher than the current cap, staying on the variable (capped) rate lets you benefit if prices fall. Check the current best fixed deals against the forecast cap level. A fix makes most sense when you believe prices will rise.

Are standing charges included in the price cap?

Yes — the price cap includes a maximum standing charge for both gas and electricity. As of early 2026, standing charges are around 61p/day for electricity and 32p/day for gas (approximately £340 per year combined). You pay these daily charges whether or not you use any energy. There is growing pressure to reform or reduce standing charges, but no changes are confirmed for the January 2027 cap.

Energy Price Cap January 2027 — Forecast and What It Means for Bills | PocketWise

Q: What is the energy price cap?

The energy price cap is a limit set by Ofgem on the maximum amount energy suppliers can charge per unit of gas and electricity and the maximum daily standing charge for customers on default (variable) tariffs. It does not cap your total bill — if you use more energy, you pay more. The cap is reviewed quarterly and changes in January, April, July, and October each year.

The Ofgem energy price cap determines how much the vast majority of UK households pay for gas and electricity. Here is what we expect for the January 2027 cap and how to prepare.

What Is the Energy Price Cap?

Detail	Information
Set by	Ofgem (Office of Gas and Electricity Markets)
Review frequency	Every 3 months (quarterly)
Quarter dates	January, April, July, October
What it caps	Maximum unit rates for gas and electricity, and maximum standing charges
What it doesn’t cap	Your total bill — you still pay for what you use
Who it applies to	Customers on default/variable tariffs (about 75% of households)
Fixed tariffs	Not covered by the cap — you pay the rate agreed in your fix
Prepayment meters	Separate but similar cap level

Price Cap History

Quarter	Annual figure (typical dual-fuel household)
Q1 2023 (Jan–Mar)	£4,279 (Government capped at £2,500 via EPG)
Q2 2023 (Apr–Jun)	£3,280 (Government capped at £2,500 via EPG)
Q3 2023 (Jul–Sep)	£2,074
Q4 2023 (Oct–Dec)	£1,834
Q1 2024 (Jan–Mar)	£1,928
Q2 2024 (Apr–Jun)	£1,568
Q3 2024 (Jul–Sep)	£1,717
Q4 2024 (Oct–Dec)	£1,717
Q1 2025 (Jan–Mar)	£1,738
Q2 2025 (Apr–Jun)	£1,849
Q3 2025 (Jul–Sep)	£1,762
Q4 2025 (Oct–Dec)	Check Ofgem for latest
Q1 2026 (Jan–Mar)	Check Ofgem for latest

January 2027 Price Cap Forecast

Element	Forecast range
Overall annual figure	£1,700–£1,900 (typical dual-fuel, direct debit)
Electricity unit rate	24p–26p per kWh
Gas unit rate	6p–7p per kWh
Electricity standing charge	55p–65p per day
Gas standing charge	30p–35p per day
Announcement date	Expected late November 2026

These are estimates based on wholesale market forward prices in early 2026. The actual cap depends on wholesale costs closer to the announcement.

What Drives the Cap Level?

Factor	Impact
Wholesale gas prices	The biggest factor — UK electricity prices are heavily linked to gas prices
Wholesale electricity prices	Directly affects the electricity unit rate
Network costs	Maintaining the gas and electricity grid — typically rises with inflation
Policy costs	Green levies, supplier obligations, warm home discount scheme
Supplier operating costs	Staffing, IT, customer service
Supplier margin	Ofgem allows a small profit margin per customer
Bad debt	Cost of customer non-payment — higher in cost-of-living pressures

What Does the Cap Mean for Your Bill?

The “typical” household figure is based on Ofgem’s assumed average consumption:

Fuel	Typical annual consumption
Electricity	2,700 kWh per year
Gas	11,500 kWh per year

Your actual bill will differ:

Household type	Likely annual bill at £1,800 cap
1-bed flat, 1 person	£1,100–£1,400
2-bed house, 2 people	£1,500–£1,800
3-bed semi, family of 4	£1,800–£2,200
4-bed detached, family of 5	£2,200–£2,800
Electricity only (no gas)	£700–£1,000
All-electric with heat pump	£900–£1,400

Should You Fix or Stay on the Variable Cap?

Scenario	Recommendation
Fixed deals available below forecast cap	Fix — you lock in a lower rate
Fixed deals higher than current cap	Stay on variable — benefit if prices fall
You want cost certainty	Fix — your rate won’t change for the fix term
You want flexibility	Variable — you can switch anytime without exit fees
You think prices will rise significantly	Fix now before rates go up
You think prices will fall	Stay on variable — the cap will drop to reflect lower wholesale costs

Current Best Fixed Deals vs Cap

Check comparison sites for the latest rates — the gap between fixed deals and the cap changes constantly:

Where to compare	Website
Ofgem-accredited comparisons	Uswitch, MoneySuperMarket, Compare the Market
Energy Helpline	energyhelpline.com
Citizens Advice price comparison	citizensadvice.org.uk/consumer/energy

Tip: A fixed deal 5%–10% below the forecast cap is generally worth taking. A fix more than 10% above the current cap is usually not worth it unless you believe prices will rise significantly.

How to Reduce Your Energy Bills

Quick Wins (No Cost)

Action	Annual saving
Turn thermostat down 1°C	£80–£130
Reduce heating on time by 30 minutes	£40–£60
Turn off standby appliances	£50–£70
Only boil the water you need	£15–£25
Wash clothes at 30°C	£20–£30
Dry clothes outside instead of tumble dryer	£50–£70
Use lids on saucepans	£10–£15
Close curtains at dusk	£10–£20
Switch off lights in empty rooms	£15–£25

Low-Cost Improvements

Action	Cost	Annual saving
LED bulbs throughout	£20–£40	£30–£50
Draught excluders on doors and windows	£10–£50	£30–£60
Reflective radiator panels	£15–£30	£20–£40
Hot water cylinder jacket	£15–£20	£30–£50
Smart thermostat	£150–£250	£75–£150
Thermostatic radiator valves (TRVs)	£10–£30 each	£50–£100

Bigger Investments

Action	Cost	Annual saving	Payback
Loft insulation (270mm)	£300–£600 (or free via ECO)	£150–£300	1–4 years
Cavity wall insulation	£500–£2,000 (or free via ECO)	£100–£300	2–6 years
Double/triple glazing	£4,000–£8,000	£50–£100	Very long
Solar panels (4kW)	£5,000–£8,000	£300–£600	8–15 years
Air source heat pump	£8,000–£18,000 (grants available)	Depends on current system	10–20 years

Government Help With Energy Bills

Scheme	Amount	Eligibility
Warm Home Discount	£150 off electricity bill	Pension Credit Guarantee or qualifying benefits
Winter Fuel Payment	£100–£300	Pensioners receiving qualifying benefits
Cold Weather Payment	£25 per 7-day cold spell	On Pension Credit or qualifying benefits
ECO4 scheme	Free or subsidised insulation	Low-income households, qualifying benefits
Boiler Upgrade Scheme (BUS)	£5,000 (heat pump) or £5,000 (biomass)	Replacing fossil fuel heating in England/Wales

See our energy grants and schemes guide for full details.

Quarterly Cap Calendar 2027

Quarter	Period	Announcement (expected)
Q1 2027	January–March	Late November 2026
Q2 2027	April–June	Late February 2027
Q3 2027	July–September	Late May 2027
Q4 2027	October–December	Late August 2027