Energy Price Cap January 2027: The Forecasts, When Ofgem Decides and What It Means for Your Bill

After a modest 4% rise in October, households in England, Scotland and Wales are facing a much bigger increase in January, according to every published forecast. Nothing is confirmed until Ofgem announces the new cap next month, but the direction is clear enough that it is worth understanding the numbers now — especially if you are weighing up a fixed deal. This guide sets out every major forecast side by side, explains a change in how the cap is measured that makes some comparisons misleading, and covers what you can do before 1 January.

What is the energy price cap now?

What is the energy price cap from October 2026? Ofgem set the cap for 1 October to 31 December 2026 at £1,723 a year for a typical household that uses both gas and electricity and pays by Direct Debit. That was a 4% rise, or about £60, on July to September. The cap applies to standard variable and default tariffs; if you are on a fixed deal, your rates stay the same until the fix ends.

The price cap is not a limit on your total bill. It caps the unit rates and daily standing charges suppliers can charge on default tariffs. The headline annual figure is simply what a household using a “typical” amount of energy would pay over a year at those rates. Use more and you pay more; use less and you pay less.

The measuring change most people miss

Ofgem has revised the “typical” amount of energy it uses for its headline figure, which is now based on 2,500 kWh of electricity and 9,500 kWh of gas a year. On the previous measure, the October cap would have been about £1,935 rather than £1,723. That matters because it makes comparisons with older headlines unreliable: a January figure of £1,999 is not directly comparable with caps you may remember from 2024 or 2025. What matters for your bill is the change in unit rates and standing charges, applied to your own usage.

Energy price cap January 2027 forecasts

Forecasters publish their predictions in the weeks before Ofgem’s announcement and update them as wholesale prices move. These are the latest figures for 1 January to 31 March 2027:

Typical dual-fuel household paying by Direct Debit, on Ofgem’s current measure. Forecasts as published by each company; Cornwall Insight raised its own figure from £1,872 in late August.

Two things stand out. First, every forecast points up, and the range between them is wide — more than £180 a year between Cornwall Insight and the highest supplier forecast. Second, the forecasts have been rising: Cornwall Insight’s first January forecast, made on the day Ofgem announced the October cap, was £1,872. Analysts have linked the rise to higher wholesale gas prices and the continuing conflict in the Middle East, and forecasts could still move in either direction before Ofgem’s cut-off.

What would the forecasts mean for your bill?

Because the headline figure is an annual total, the easiest way to understand the change is per month, averaged over a year:

Annual figures divided by 12. Real bills are higher in winter and lower in summer, so the extra cost between January and March will feel larger than the yearly average.

When will Ofgem announce the January 2027 price cap?

Ofgem’s timetable says it will announce the cap for 1 January to 31 March 2027 by Wednesday 25 November 2026, and it has said it may publish earlier. The new rates take effect on Friday 1 January 2027, so suppliers must notify customers on default tariffs of the new rates before then.

The cap is calculated from wholesale prices over an observation window that ends some weeks before the announcement, which is why forecasts converge as the date approaches. The figure Ofgem publishes is the one that counts; forecasts are only estimates.

Should you fix your energy before January?

Fixed tariffs lock your unit rates and standing charges for a set period, usually 12 months, protecting you from the January rise — and from any falls. Some fixed deals have recently been priced at around £1,900 a year for a typical household: above today’s £1,723, but below the January forecasts.

Whether a fix is worth it depends on what happens after January as well as in it. A 12-month fix covers four price cap periods, not one. If wholesale prices fall back in the spring, a fix taken now could end up costing more over the year than staying on the cap. Before you fix, check:

• The annual cost for your usage, not just the headline typical figure.
• Exit fees, in case prices fall and you want to switch.
• The standing charges, which matter more if you use little energy.
• How long the deal lasts, and what it will be compared against in each quarter.

There is no wrong answer for everyone. Households that value certainty, or that would struggle with a sudden rise, may prefer a fix even if it costs a little more over the year. Others may prefer to wait for Ofgem’s confirmed figure on 25 November before deciding.

Seven things to do before 1 January

1. Take a meter reading on 31 December or 1 January. Submitting it means you are billed at the old rates for energy used before the change.
2. Check your Direct Debit. Make sure it reflects your actual usage and that any credit built up over summer is accounted for.
3. Compare fixed deals against the confirmed cap once Ofgem announces it.
4. Check your Warm Home Discount eligibility. It is currently worth £150 for eligible households.
5. Join the Priority Services Register if you or someone in your home is older, disabled or has a medical condition that depends on power.
6. Talk to your supplier early if you are struggling. Suppliers must discuss affordable payment plans and many have hardship funds.
7. Check the other winter help, including the Winter Fuel Payment and Cold Weather Payments.

Does the price cap apply everywhere in the UK?

The Ofgem price cap applies in England, Scotland and Wales. Northern Ireland has a separate energy market and no equivalent cap, so households there should follow announcements from their own suppliers and the Utility Regulator.

Energy price cap January 2027: your questions answered

Will energy bills go up in January 2027? Every major forecast says yes, by between about 16% and 27% for a typical household. Ofgem will confirm the figure by 25 November.

What is the price cap forecast for January 2027? Cornwall Insight forecasts £1,999 a year; OVO £2,161; British Gas £2,185.

When does the new price cap start? Friday 1 January 2027, running to 31 March 2027.

Does the price cap affect fixed tariffs? No. Fixed rates stay the same until the fix ends.

Is the price cap the maximum I can pay? No. It caps the unit rates and standing charges, not your total bill.