1. The short answer
Expect roughly £1,729 a year on the new consumption basis, up from £1,663 - an increase of about 4 percent for a typical dual-fuel household paying by direct debit. Cornwall Insight published that figure on 19 August 2026. Ofgem confirms the actual level on 27 August, and forecasts this close to the announcement are usually within a few pounds.
One caveat before you compare it to anything: the cap is a cap on unit rates and standing charges, not on your bill. If you use more than the typical household, you pay more than the headline figure. Nobody is capped at £1,729.
2. Why the number looks smaller than last year's
Short answer: the yardstick changed, not just the price. Ofgem publishes the cap against Typical Domestic Consumption Values - an assumed annual usage for a typical household. Those values were revised, and the same cap now reads £1,663 on the new basis against £1,862 on the previous one.
That is a difference of £199 in the headline number for exactly the same underlying prices. Any comparison that mixes the two bases is meaningless, and a lot of coverage does mix them. When you see a figure quoted, check which basis it uses before concluding that bills went up or down.
The practical consequence: judge the change by unit rate and standing charge, not by the annual headline. Those are the numbers on your statement, and they are what actually multiply against your usage.
3. What is pushing the October cap
Wholesale costs, moving with the same crude market as everything else. Brent trades at $91.99 a barrel. The IEA's August report describes Gulf exports down 2.1 million barrels a day to 15 million after the Strait of Hormuz closure, with global supply projected to fall 4.3 million barrels a day across 2026 and inventories at their lowest since April 2025.
Pulling the other way: the electricity VAT cut announced on 21 July 2026. Cornwall Insight states that its forecast already includes that measure, which moderated what would otherwise have been a steeper rise. If you are comparing forecasts published before and after 21 July, that is the discrepancy you are looking at.
Standing charges remain the contested part. They are levied per day regardless of usage, which hits low-consumption households hardest in percentage terms. The debate over rebalancing them into unit rates has not been settled, and it affects small flats and second homes far more than the headline figure suggests.
See what a further oil price shock would add to your household costs.
Run the scenario4. Should you fix before 27 August?
Short answer: compare the fixed offer to the forecast, not to the cap you are on now. The relevant comparison for a deal starting in October is £1,729, not £1,663. A fix that looks like a premium against today's cap may be roughly at parity against the level that is about to take effect.
- A fix priced below the forecast level is worth serious consideration, particularly if the exit fees are low or absent. You are buying certainty in a market where crude ranged almost $40 a barrel within a single month.
- A fix priced well above it only makes sense if you place a high value on budget certainty for more than a year, since the cap moves quarterly and can fall as well as rise.
- Check exit fees before anything else. A fix with no exit fee lets you leave if the Strait of Hormuz reopens and wholesale costs drop; a fix with high exit fees locks you into a bet.
If you do nothing, you stay on the capped variable tariff and pay whatever Ofgem sets on 27 August. That is a legitimate choice, not a failure - it is simply the option with no certainty and no penalty.
5. What happens after December
The cap is reset quarterly, so the October level runs to 31 December 2026 and is replaced in January. Forecasts that far out carry wide error bars, and the biggest single variable is not domestic policy but the Strait of Hormuz.
Qatar reported on 12 August 2026 that talks between Oman and Iran were at an advanced stage. A reopening would ease wholesale costs into the January cap. Working the other way, the US Treasury announced expanded secondary sanctions against Iran on 24 August 2026, designating close to 60 entities, individuals and vessels - measures that remove supply rather than add it.
For 2027 the IEA projects global oil demand growing again by 2.4 million barrels a day. If that demand recovery meets a supply base that has not repaired itself, the pressure on the caps beyond winter is upward rather than downward.