UK Home Energy Price Cap & Bill Changes from January 2027

What is happening to the UK home energy price cap in January 2027?

From January 2027 the UK home energy price cap is scheduled to change again as Ofgem updates the way it sets the maximum price that suppliers can charge for standard variable and default tariffs. While the exact unit rates and standing charges will be confirmed closer to the time, the direction of travel is clear: households will continue to see price movements driven by wholesale markets, network costs and government policy.

The January 2027 changes will affect millions of households on standard variable tariffs in England, Scotland and Wales. If you do not actively choose a fixed tariff, your bill will continue to be governed by the price cap. Understanding how this works is essential if you want to keep your bills as low as possible.

Quick recap: how the Ofgem price cap works

The Ofgem price cap is not a cap on your total bill. Instead, it limits the maximum amount your home energy supplier can charge per kWh for gas and electricity, plus the daily standing charge, for customers on standard variable or default tariffs.

• Unit rate (p/kWh) – what you pay for each unit of energy you use.
• Standing charge (p/day) – a daily charge to cover the cost of keeping your home connected.
• Average annual bill – Ofgem often quotes a typical annual cost for a “medium-use” household, but your actual bill depends entirely on how much energy you use.

The price cap is reviewed regularly. By January 2027, Ofgem is expected to refine its methodology again in response to the energy market, the growth of renewables, and ongoing affordability concerns for households.

What the January 2027 home energy changes could mean for your bills

While we do not yet know the exact January 2027 figures, there are several likely impacts you should be prepared for:

• Adjustments to unit rates – electricity and gas unit rates may rise or fall depending on wholesale prices, network upgrades and environmental levies.
• Ongoing high standing charges – standing charges have become a larger share of the bill; this trend could continue, affecting low-usage households most.
• More volatile variable tariffs – standard tariffs may still move up and down more frequently, making budgeting harder if you only use the price cap as a guide.
• Growing gap between fixed and variable deals – as stability gradually returns to markets, more fixed home tariffs may appear that offer better value than simply staying on the price cap.
• Greater focus on energy efficiency – government and suppliers are likely to keep pushing insulation, heat pumps, smart controls and behaviour change to help households cut their usage.

How to prepare your home for the 2027 price cap changes

You don't have to wait until 2027 to act. There are practical steps you can take now to make sure your home is ready for future price changes and that every unit of energy you buy is used efficiently.

1. Understand your current tariff and usage

Start by checking your latest energy bill or online portal:

• Are you on a standard variable tariff that follows the price cap, or a fixed tariff with guaranteed rates?
• What are your unit rates and standing charges for gas and electricity?
• How many kWh of energy do you typically use per month and per year?

This will help you see how much impact a future price cap change is likely to have on your home and where the biggest savings opportunities lie.

2. Reduce avoidable energy waste

Cutting unnecessary usage is the fastest way to protect yourself from price movements in January 2027 and beyond. Some of the most effective steps include:

• Heating controls – turn your thermostat down by 1°C, use programmer schedules, and avoid heating empty rooms.
• Insulation – check loft insulation, draft-proof doors and windows, and consider cavity wall insulation where suitable.
• Hot water – reduce boiler flow temperature (for combi boilers), use eco cycles on dishwashers and washing machines, and avoid overfilling the kettle.
• Lighting and appliances – swap halogen bulbs for LEDs, avoid standby where possible, and choose A-rated appliances when you replace old ones.

3. Embrace smart meters and in-home displays

By January 2027, smart meters will be the norm in most UK homes. A smart meter shows your energy use in near real time, helping you see immediately how your habits affect your bill.

• Track which appliances consume the most power and when.
• Spot unusual spikes in usage that could be costing you money.
• Use off-peak times (with any time-of-use tariffs) to run high-consumption appliances.

Many households find that simply being able to see their usage helps them cut their bills without sacrificing comfort.

4. Consider low-carbon heating and home upgrades

Looking ahead to 2027 and beyond, government policy will continue to support technologies that reduce carbon emissions and dependency on imported fossil fuels. As part of your longer-term planning you may want to review:

• Heat pumps – air-source and ground-source systems can be efficient in well-insulated homes.
• Solar PV – generating your own electricity reduces the amount you need to buy from the grid.
• Battery storage – store cheap or self-generated electricity to use at peak times.
• High-performance glazing and insulation upgrades – cut heat loss and improve comfort while lowering your consumption.

These options involve an upfront cost, but over time they can significantly cut the impact of any future energy price cap increases.

Fixed vs variable tariffs under the 2027 price cap

As markets stabilise, more home energy suppliers are offering fixed-rate deals again. Choosing between staying on a price-capped variable tariff or moving to a fixed tariff will be an important decision as January 2027 approaches.

Staying on a variable (price-capped) tariff

Pros:

• Automatically follows the price cap, so you shouldn't pay more than Ofgem's regulated level for your default tariff.
• No early exit fees on most standard variable tariffs.
• Beneficial if prices fall in future cap updates.

Cons:

• Your unit rates can rise at each cap review.
• Harder to budget long-term household costs.
• Often more expensive than the most competitive fixed deals when markets are calmer.

Taking out a fixed home energy tariff

Pros:

• Certainty over your unit rates for 12, 24 or 36 months (depending on the deal).
• Easier to budget and plan your monthly outgoings.
• Protection if future price cap levels rise sharply.

Cons:

• May include exit fees if you switch again before the end of the term.
• If price caps fall during your fixed period, you could end up paying more than the variable rate.

The right choice for your home will depend on your risk appetite, your current budget and how soon you expect to move property. Reviewing your options regularly is key as we move closer to January 2027.

Support and protection for households facing higher bills

With the cost of living under pressure, many households are worried about how they will cope if bills rise again around January 2027. A range of schemes and protections already exists, and further policy updates are likely as the government responds to changing conditions.

Existing help with energy bills

Depending on your circumstances, you may qualify for support such as:

• Warm Home Discount – a one-off discount on electricity bills for eligible households.
• Winter Fuel Payment – tax-free payments for most people born before a certain date.
• Cold Weather Payment (where applicable) – payments if the average temperature in your area is recorded as, or forecast to be, very low for several days.
• Supplier hardship funds – some suppliers provide discretionary support for customers in serious financial difficulty.

As January 2027 approaches, always check the latest government guidance and speak to your supplier early if you're struggling – they are required to work with you to find a manageable solution.

If you're worried about falling behind

If you are already finding it difficult to keep up with your home energy payments, do not wait for the 2027 changes before acting. Contact your supplier to discuss:

• Affordable repayment plans based on your income and expenditure.
• Prepayment meter options and potential support if you rely on a prepayment meter.
• Energy efficiency advice and schemes that may be available in your region.

Frequently asked questions about the January 2027 home energy price cap

Will the January 2027 price cap automatically lower my bill?

Not necessarily. If the cap level falls, your unit rates may go down, but if your usage goes up, your total bill could still rise. Likewise, if the cap increases, energy-efficient homes that use less will feel the impact less sharply.

Do I need to contact my supplier when the price cap changes?

If you are on a standard variable tariff, changes are typically applied automatically from the date the new cap takes effect. However, if you are on a fixed tariff that expires around that time, you should compare your options before you roll onto a default tariff.

Will the price cap still exist after 2027?

Ofgem and the government review the price cap framework regularly. While no final decision has been made on the long-term future beyond 2027, any changes are likely to be phased and announced well in advance. For now, households can expect the cap to remain a core part of UK home energy regulation.

How can I protect myself if prices rise again?

The most reliable protection is to reduce the amount of energy you use through efficiency and smart habits. You can also consider suitable fixed tariffs, explore low-carbon upgrades and make sure you're claiming all the support you are entitled to.

Stay informed about the January 2027 energy price cap

Energy Plus is here to help UK households navigate the changing home energy landscape. As January 2027 approaches, we will update this page with the latest confirmed figures, practical tips and guidance to help you keep your gas and electricity costs under control.

Whether you are planning a home move, thinking about a new boiler or simply trying to shrink your monthly bills, staying informed will allow you to make confident decisions.