Ofgem January 2027 price cap forecast: £1,872 a year, up 9% — confirmed in late November
The forecast rates, what they mean for a typical bill and for yours, when the number is confirmed, and how to decide whether to fix before it lands.
- Forecast unit rates and standing charges for January–March 2027, next to October’s confirmed rates
- A worked bill at Ofgem’s typical use, and how to run your own numbers
- The announcement date and what could still move the figure
A forecast is not the cap. Ofgem sets the January–March 2027 level in late November; the figures here are Cornwall Insight’s published forecast and Ofgem’s confirmed October rates.
Compare fixed deals against the forecast, on your own details
The cap is a national headline. A comparison uses your postcode, meter type, payment method and usage, which is where the real answer sits. To compare like for like, have ready:
- Postcode — network costs, and so capped rates, differ by region
- Annual usage in kWh for each fuel (last 12 months from a bill or app)
- Meter and payment type — prepayment, standard credit, Direct Debit, Economy 7
- Your current tariff’s end date and exit fee, if it is a fix
A useful yardstick: a fixed deal that costs less than the £1,723 October cap at your usage also beats the £1,872 January forecast. If the best fix you can find is above the cap, staying on the variable rate and re-checking after the late-November announcement is a reasonable choice.
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When the January 2027 forecast matters most
- Your fixed tariff ends around late 2026 and you’re deciding whether to lock in earlier.
- You’re on a standard variable tariff and want to understand winter risk.
- You have high usage (larger homes) where unit rate changes have a bigger impact.
Fast answer: will the price cap go up in January 2027?
On the only published forecast, yes. Cornwall Insight expects the cap to rise to £1,872 a year from 1 January 2027 — about 9% above October’s £1,723 and 13% above the £1,663 in force until 30 September. The rise is gas-led: Ofgem said most of October’s increase came from higher gas costs, and gas makes up just over half of a typical dual-fuel bill. Electricity stays VAT-free until 31 March 2027, so the electricity side moves less.
Key takeaways
The number
£1,872 a year for a typical dual-fuel Direct Debit household — Cornwall Insight’s forecast, published 26 August 2026 (£2,107 on the older consumption basis).
When it is decided
Ofgem announces the January–March 2027 cap in late November 2026. The new rates apply from 1 January to 31 March 2027.
Who it affects
Households on a standard variable or other default tariff. Ofgem puts about 35% of households on fixed deals, which are unaffected while the fix runs.
January 2027 price cap forecast next to the confirmed October cap
Typical dual-fuel household, paying by Direct Debit, on Ofgem’s current typical-consumption values (2,500 kWh of electricity and 9,500 kWh of gas a year).
| Cap period | Typical annual bill | Change | Status |
|---|---|---|---|
| 1 July – 30 September 2026 | £1,663 | — | Confirmed by Ofgem (in force now) |
| 1 October – 31 December 2026 | £1,723 | +£60 (+4%) | Confirmed by Ofgem, 26 August 2026 |
| 1 January – 31 March 2027 | £1,872 | +£149 (+9%) | Forecast — Cornwall Insight, 26 August 2026. Ofgem confirms late November 2026 |
Forecast unit rates and standing charges (Direct Debit, national average)
| October–December 2026 (confirmed) | January–March 2027 (forecast) | |
|---|---|---|
| Electricity unit rate | 26.32p per kWh | 28.33p per kWh |
| Electricity standing charge | 54.83p per day | 55p per day |
| Gas unit rate | 7.97p per kWh | 8.94p per kWh |
| Gas standing charge | 29.68p per day | 31p per day |
What would you pay from January 2027?
Take your annual usage in kWh from a bill or your supplier’s app, multiply by the forecast unit rate, and add 365 days of standing charge. At Ofgem’s typical use the maths comes out like this:
Typical dual-fuel home (Direct Debit)
- Electricity: 2,500 kWh
- 2,500 × 28.33p = £708, plus 365 × 55p = £201 → £909
- Gas: 9,500 kWh
- 9,500 × 8.94p = £849, plus 365 × 31p = £113 → £962
- Total
- About £1,871 a year, or £156 a month — Cornwall Insight’s unrounded figures give £1,872.
Electricity-only flat, low use
- Electricity: 1,800 kWh, no gas
- 1,800 × 28.33p = £510, plus 365 × 55p = £201 → £711 a year (about £59 a month)
- Why the standing charge matters here
- Nearly 30% of this bill is the daily charge, which does not fall when you use less. Low users should compare tariffs on total annual cost, not the unit rate alone.
Fix now or wait for January? A quick decision table
The right call depends on what you are on today and when it ends. This is the way we would think it through; it is not financial advice.
| Your situation | What the forecast implies | What to check |
|---|---|---|
| On a standard variable tariff, no exit fee | Your rates rise on 1 October and, on the forecast, again on 1 January. A fix priced below £1,723 at your usage beats both. | Fixed for the full term? Exit fee? Price for your region and meter, not the national headline. |
| Fixed deal ending in November or December 2026 | You would roll onto the variable rate just as the January level lands. | You can switch without an exit fee in the last 49 days of a fix. Compare before the end date rather than after. |
| Fixed until spring 2027 or later | Nothing changes for you in January. | Diary the end date; the April 2027 cap is announced in late February 2027. |
| Prepayment meter | The cap sets a separate prepayment level; the £1,872 figure is the Direct Debit one. | Compare prepay tariffs on your meter type; ask about switching to a smart meter if that suits you. |
| You expect prices to fall | Staying variable keeps that option, but the only published forecast points up until at least March. | Set a reminder for the late-November announcement and compare again then. |
When Ofgem confirms the January 2027 cap, and what could still move it
Ofgem announced the October cap on 26 August, about five weeks before it started, and the January–March 2027 cap is expected on the same rhythm in late November 2026. The level is built from wholesale gas and electricity prices over the months before the announcement, plus network charges, policy costs, supplier operating costs and VAT.
What would push it above £1,872
A cold start to winter or a supply shock lifting wholesale gas prices further, or higher network and policy charges than assumed.
What would pull it below
A mild autumn and easing gas markets during the observation window. The forecast is a snapshot of the futures market on 26 August.
What is fixed already
Electricity stays VAT-free until 31 March 2027, and the typical-consumption values used for the headline do not change until Ofgem reviews them.
Costs, exclusions and common pitfalls (UK-specific)
1) “The cap is my bill” misconception
The cap limits rates, not total spend. If your household uses more than typical levels (larger homes, electric heating, poor insulation), your bill can be significantly higher even on a capped tariff.
2) Standing charges can dominate for low users
If you use little energy (small flat, out at work), standing charges may make up a large share of your annual cost. Compare tariffs on total annual cost using your usage where possible.
3) Economy 7 / multi-rate meters
If you have an Economy 7 meter, your costs depend on how much usage you can shift to off-peak hours. A “good” unit rate headline can hide a poor off-peak/on-peak split for your lifestyle.
4) Exit fees and moving home
Fixed tariffs often include exit fees. Some suppliers waive fees if you move and stay with them, but it varies. Tenants should check the tariff terms carefully.
5) Regional differences are real
The cap level varies across Great Britain because network costs differ by region. That’s why postcode matters when you compare.
6) Not all households are eligible for every tariff
Availability can depend on meter type, smart meter status, credit checks, and whether you can pay by Direct Debit. A forecast doesn’t account for these practical constraints.
If you’re worried about paying your bills: you may be eligible for support (including supplier hardship funds, payment plans, and emergency credit for prepayment). Start with Citizens Advice for step-by-step help: Citizens Advice: help paying your energy bills.
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FAQs: the January 2027 Ofgem price cap
Will the energy price cap go up in January 2027?
On the only published forecast, yes. Cornwall Insight expects the January–March 2027 cap to be £1,872 a year for a typical dual-fuel household paying by Direct Debit, about 9% (£149) above the £1,723 October cap. Ofgem confirms the actual figure in late November 2026.
What is the January 2027 price cap forecast?
£1,872 a year on Ofgem’s current typical-consumption basis (£2,107 on the older basis), published by Cornwall Insight on 26 August 2026 alongside Ofgem’s October announcement. It already allows for the zero rate of VAT on electricity.
When will Ofgem announce the January 2027 price cap?
Ofgem publishes each cap about five weeks before it starts, so the January–March 2027 level is expected in late November 2026. The new unit rates and standing charges then apply from 1 January to 31 March 2027.
What unit rates are forecast for January 2027?
Cornwall Insight’s forecast is 28.33p per kWh plus a 55p daily standing charge for electricity, and 8.94p per kWh plus 31p a day for gas, for Direct Debit customers. October’s confirmed rates are 26.32p and 54.83p for electricity and 7.97p and 29.68p for gas, so most of the rise is in unit rates, led by gas.
Is VAT still zero on electricity in January 2027?
Yes. The Government removed VAT from domestic electricity for 1 October 2026 to 31 March 2027, so the January cap keeps electricity VAT-free. Gas stays at 5%. Whether the zero rate continues from April 2027 has not been announced.
Does the January 2027 cap affect a fixed tariff?
No. A fixed deal keeps its own unit rates and standing charges until it ends. Ofgem says around 35% of households are on fixed tariffs and will not be affected by the October rise; the same applies to any January change while the fix runs.
Should I fix before January 2027?
If a fixed deal available today costs less than the £1,723 October cap for your usage, it also undercuts the £1,872 January forecast. Check the exit fee, the end date and whether the price is fixed for the whole term. If you would rather stay flexible, remember the forecast direction through March is up, not down.
Trust, methodology and sources
Page ownership
- Written by
- EnergyPlus Editorial Team
- Reviewed by
- Energy Specialist
- Last updated
- 18 September 2026
How we handle forecasts
- Confirmed figures come from Ofgem, quoted as published, with the date of the announcement.
- Forecasts are attributed and dated. The January figure is Cornwall Insight’s, published 26 August 2026; we do not publish forecasts of our own.
- Worked examples show the arithmetic so you can swap in your own usage and the confirmed rates once Ofgem publishes them.
- We update this page when Ofgem announces the January–March 2027 cap.
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