Hold a UK visa, how much has the energy price cap increased?

Has the energy price cap been increased, and is £5 a month enough? Ofgem announced on August 26, 2026: from October 1 to December 31, 2026, the annualized reference bill for a typical household increased from £1,663 to £1,723, an increase of about 4%, equivalent to an additional £5 per month. This average cannot be directly used as your own winter budget.

My judgment is that households using gas heating should recalculate their budget based on actual winter usage, rather than just adding £5 to the monthly deduction.

£1,723 with a set of usage conditions

This set of figures corresponds to a typical household in England, Scotland and Wales, using the default mobile bundle and paying gas and electricity bills by Direct Debit. According to Ofgem's "Price Cap and Standing Charge Explanation", the cap restricts the combination of unit price and standing charge (daily fixed fee), but the total bill still varies with usage. What is easier to miss is that the "editing note" in this announcement, item 2, states that the typical household consumption standard was updated in July 2026; at the same price level in October, it is £1,723 using the new standard, and £1,935 using the old standard. When reading different annual totals, it is necessary to check the consumption standard together, and a smaller reference amount does not directly mean that you have saved money.

Tenants who have rent including utility fees should refer to their lease agreement; fixed plans and building central heating cannot be directly applied to the table below.

Homes using gas show more noticeable changes

According to the average rates published by Ofgem, the increase in gas unit prices is significantly higher than that of electricity. Below are the direct debit rates for the two quarters of 2026, suitable for households that pay their gas and electricity bills manually; actual quotes may vary depending on the region, payment method, and type of electricity meter.

The heating method is different, so the expenditure varies; for all-electric households, both the unit price and fixed daily fees should be calculated together.

Electricity tax reduction has been included in the new price.

The updated "Fuel and power (VAT Notice 701/19)" by HMRC on September 8, 2026, clearly states: From October 1, 2026, to March 31, 2027, the electricity used by eligible households in Great Britain will be subject to zero rate; gas will still be charged at 5% (VAT), and electricity for households in Northern Ireland will remain at 5%. Ofgem has included the electricity tax reduction in the new rates in the above table, so when calculating with 26.32 pence, there is no need to deduct 5% again. Fixed-rate customers will also have the electricity tax reduction automatically applied by their supplier, which can coexist with the statement that "fixed-rate plans do not increase with this round of price caps". When verifying the new bill, it is easier to check the difference by looking at the tax rates for electricity and gas separately, rather than just looking at the total amount.

This tax rate adjustment applies according to the power supply area and usage. The official statement does not list a requirement for permanent residency status, and families holding UK visas can also use this to verify their bills.

Put winter usage back on the bill

Write "Estimated Consumption" and "Bank Deduction" separately on the budget sheet. Take the electricity and gas usage from the bills between October 2025 and December 2025, multiply each by the new unit price between October 2026 and December 2026, add the fixed daily charges according to the corresponding number of days, calculate the amount in pence and divide by 100 to get a budget reference for maintaining the same usage. Households that have moved, changed heating methods, or have different numbers of people living together need to adjust their usage assumptions. Automatic deductions may also include outstanding debts or account balance adjustments; you can ask the supplier to list the estimated usage and balance basis. The existing renewal fee budget should be placed in a separate column to clearly see the energy expenses that can be borne each month.

Keep the reading before the price adjustment together with the new rate notice, which will make it easier to match with the next bill. When there is a budget gap, you can discuss with the supplier the payment arrangements you can afford in advance. Set aside money for winter, calculate a number based on your own usage, and you will have more confidence in your budget.

This article is for reference only. For specific issues, please consult a licensed attorney.

[Data Source] Ofgem: Price Cap Announcement on August 26, 2026, unit price of gas and electricity and fixed daily fee table; HMRC: "Fuel and power (VAT Notice 701/19)".

Dealing with a UK legal matter? JustiScript can help