After several turbulent years, many households are wondering the same thing: when will energy prices actually come down?
Unfortunately, there’s no major drop on the immediate horizon.
The Ofgem energy price cap increased again in October 2026, and current forecasts suggest bills could rise quite sharply in January 2027 before beginning to ease later in the year.
The good news? Energy prices are still well below the extraordinary levels seen during the height of the energy crisis.
Here’s where things stand now, what the latest forecasts are saying and what you can do to keep your bills down in the meantime.
The Current State of Energy Prices
The Current Price Cap: October to December 2026
From 1 October to 31 December 2026, the Ofgem energy price cap is £1,723 a year for a typical dual-fuel household paying by Direct Debit.
That’s up from £1,663 during the previous quarter, an increase of around 4%, or roughly £5 a month for a typical household.
Period | Typical Annual Price Cap |
Jan-Mar 2026 | £1,758 |
Apr-Jun 2026 | £1,641 |
Jul-Sep 2026 | £1,663* |
Oct-Dec 2026 | £1,723 |
*Ofgem changed the amount of energy it assumes a typical household uses from July 2026, so the headline figures aren't directly comparable. On a like-for-like basis, Ofgem said prices increased by around 13% in July.
Under the current cap, the average Direct Debit rates are:
Electricity: 26.32p per kWh
Electricity standing charge: 54.83p per day
Gas: 7.97p per kWh
Gas standing charge: 29.68p per day
These are averages across England, Scotland and Wales, so your actual rates will vary slightly depending on where you live.
And remember, the energy price cap isn’t a cap on your total bill. It limits the rates suppliers can charge on standard variable tariffs. Use more energy and you'll still pay more.
Why Have Energy Prices Risen Again?
The main reason is higher wholesale gas prices.
Ofgem says the October increase was driven by rising gas costs linked to ongoing disruption and uncertainty in the Middle East.
That affects electricity prices too. Gas-fired power stations still play an important role in Britain's electricity system, meaning changes in the gas market can feed through into electricity bills.
There has been some help from the government.
From 1 October 2026 until 31 March 2027, VAT has been removed from domestic electricity bills, although gas bills still carry 5% VAT.
Without that change, household bills would have been higher still.
So while energy prices haven't returned to anything like the chaos of 2022, the downward trend we saw earlier has unfortunately stalled.
So, When Will Energy Prices Go Down?
Probably not this winter.
The current cap runs until the end of December, and the latest forecasts suggest another sizeable increase could arrive when the cap changes again on 1 January 2027.
Cornwall Insight's latest forecast puts the January price cap at around £1,999 a year, roughly 16% higher than the current £1,723 cap.
That's quite a change from earlier forecasts, which suggested the market might remain relatively stable.
Why?
Wholesale prices have risen again, particularly as concerns around global gas supplies have increased.
The important thing to remember is that January's cap hasn't been set yet.
Ofgem will announce the final figure by 25 November 2026, with the new rates taking effect from 1 January.
So forecasts can, and probably will, move before then.
What Will Happen to Energy Prices in 2027?
This is where things become much less certain.
The further into the future you try to predict energy prices, the more you're relying on assumptions about wholesale markets, weather, gas storage and global events.
Still, the current picture looks something like this:
Period | Current Outlook |
Oct-Dec 2026 | £1,723 confirmed |
Jan-Mar 2027 | Significant increase expected |
Apr-Jun 2027 | Small fall currently forecast |
Jul-Sep 2027 | Further easing possible |
Current forecasts suggest that prices could remain elevated through much of the first half of 2027 before beginning to fall more noticeably later in the year.
So, if you're waiting for energy bills to suddenly return to pre-crisis levels, you could be waiting a while.
Why Are Forecasts So Uncertain?
The UK energy market is affected by far more than what's happening inside the UK.
Some of the biggest factors include:
Wholesale gas prices
European gas storage levels
Global supply disruptions
Weather and winter temperatures
Electricity network costs
Government policy
International conflicts
A relatively small change in the wholesale market can therefore alter forecasts months before a new price cap takes effect.
That's why it's better to treat long-range forecasts as a direction of travel, rather than a promise of what your bill will be.
Will Energy Prices Ever Return to Pre-2021 Levels?
Possibly, but there’s little evidence that it'll happen soon.
Energy prices have fallen substantially from their 2022 peak, but household bills remain well above the levels seen before the energy crisis.
The House of Commons Library also notes that prices remain significantly higher than before the crisis, with limited expectation of a dramatic near-term reduction.
There are several reasons for that.
Wholesale energy costs remain higher, while network upgrades and investment in the electricity grid also have to be paid for.
The more realistic scenario is therefore a gradual easing of bills, rather than one dramatic price drop.
Energy Help Guides:
How Can I Reduce My Energy Bills?
You can't do much about international gas prices, unfortunately.
But you can reduce how much energy your home uses and make sure you're not paying more than necessary.
Check Your Energy Tariff
If you're currently on a standard variable tariff, don't automatically assume the price cap is the cheapest option.
Fixed-rate deals have returned to the market and, at various points during 2026, many were cheaper than the price cap.
With prices currently expected to rise again in January, comparing available fixes may be worthwhile.
Just make sure you look at:
The unit rates
Standing charges
Length of the fix
Exit fees
Whether the tariff is actually cheaper based on your usage
A lower headline annual figure doesn't always mean a cheaper deal for your particular household.
Improve Your Home's Energy Efficiency
There are also plenty of simple ways to cut down on wasted energy.
Our top tips include:
Keep internal doors closed in the evening.
Close curtains or blinds once it gets dark.
Avoid blocking radiators with large pieces of furniture.
Wash clothes at 30°C where suitable.
Wait for a full load before running your washing machine or dishwasher.
Air-dry clothes where practical.
Keep your fridge at around 3°C to 5°C and your freezer at around -18°C.
Avoid boiling more water than you need.
Take shorter showers rather than filling a bath.
Draught-proof windows and doors where needed.
Check whether your loft or walls could benefit from better insulation.
None of these will magically halve your energy bill, but together they can make a noticeable difference.
Use Your Heating More Efficiently
Heating is one of the biggest contributors to household energy use, so small improvements here can be particularly useful.
Make sure your thermostat and heating schedule match when you're actually at home.
If you have thermostatic radiator valves, you can also turn down the temperature in rooms you rarely use rather than heating the entire house to the same level.
And if you have a modern condensing boiler, making sure it's properly set up and serviced can help it operate more efficiently.
Government Support: What's Still Available?
There are still several schemes available to households struggling with energy costs.
Warm Home Discount
The Warm Home Discount provides eligible households with a £150 discount on their electricity bill during winter 2026/27.
Most eligible households in England and Wales receive it automatically, while the system works slightly differently in Scotland.
Winter Fuel Payment
Eligible older households can receive between £100 and £300 towards winter heating costs.
For winter 2026/27, people born on or before 27 June 1960 may qualify. Those with incomes above £35,000 will have the payment recovered through the tax system.
Cold Weather Payment
Eligible households can receive £25 for each seven-day period where the average temperature is recorded or forecast to remain at 0°C or below.
The scheme runs between 1 November 2026 and 31 March 2027 in England, Wales and Northern Ireland. Scotland operates a separate Winter Heating Payment.
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