Average Gas & Electricity Prices per kWh (2026)

Understanding average energy prices in 2026

Energy prices play a huge part in managing a household budget. Knowing the average cost of gas and electricity helps you understand your own bills, check if you are paying a fair rate, and decide whether you should switch to a different tariff. The rates you pay depend on the wholesale cost of energy, government schemes, and the rules set by the regulator.

In Great Britain, the Ofgem price cap limits the maximum amount suppliers can charge for each unit of gas and electricity on a standard variable tariff. It also caps the daily standing charge. Most households in England, Scotland, and Wales are currently on tariffs controlled by this cap. Northern Ireland has a separate energy market and its own regulatory rules.

Energy prices change every three months when Ofgem updates the price cap. The current rates apply from 1 July to 30 September 2026. However, Ofgem has already confirmed the upcoming rates for the winter period. From 1 October 2026, average household energy bills will increase slightly, driven mainly by higher wholesale gas costs, though a temporary government cut to electricity VAT will help keep electricity prices mostly stable.

Current average prices (1 July to 30 September 2026)

For the period between 1 July and 30 September 2026, the Ofgem price cap is set at £1,663 a year for a typical dual-fuel household paying by Direct Debit. This figure is based on an assumed typical usage of 2,500 kWh of electricity and 9,500 kWh of gas over a full year.

Under these current summer rates, the national average price for electricity is 26.11p per kilowatt-hour (kWh), alongside a daily standing charge of 57.19p. For gas, the national average price is 7.33p per kWh, with a daily standing charge of 29.04p. These figures include the standard 5% VAT applied to domestic energy bills.

These rates represent a national average across Great Britain. The exact unit rate and standing charge you pay will vary slightly depending on which region you live in, as the cost to supply energy changes based on local network charges. Your supplier should clearly show your specific regional unit rates and standing charges on your latest bill or online account.

Confirmed prices from 1 October 2026

Ofgem confirmed on 26 August 2026 that the Great Britain price cap will rise for 1 October to 31 December 2026. The annualised Direct Debit dual-fuel illustration increases by 4%, or £60, from £1,663 to £1,723 for a household using the revised typical consumption values.

From 1 October, the national average electricity rate for Direct Debit customers will be 26.32p per kWh, with the standing charge dropping slightly to 54.83p per day. The gas rate will rise to 7.97p per kWh, and the gas standing charge will increase slightly to 29.68p per day. Do not treat these October rates as current until 1 October arrives; your supplier will continue to bill you at the lower summer rates for any energy you use up to the end of September.

Ofgem attributes the October increase mainly to higher wholesale gas prices. The effect is not uniform across fuels: the VAT removal keeps electricity bills broadly stable, while Ofgem says gas bills rise by about 8%.^[1]

VAT changes and the gap between gas and electricity

From 1 October 2026 to 31 March 2027, VAT on domestic electricity in Great Britain falls from 5% to 0%. Gas remains subject to 5% VAT. Northern Ireland has separate energy-market and support arrangements.

Ofgem says the VAT removal keeps electricity bills broadly stable despite higher wholesale costs. The change is already reflected in the published October electricity rates and applies automatically to eligible Great Britain domestic electricity bills, including fixed tariffs.^[1]

The effect differs by fuel mix. Ofgem says gas bills rise by about 8% under the October cap, while households that use no gas see an increase of less than 1%. A gas-heated household may therefore experience a different change from the 4% dual-fuel headline illustration.^[2]

How the Ofgem price cap actually works

A common misunderstanding is that the Ofgem price cap is a strict limit on the total amount you can be billed in a year. This is not the case. The cap only limits the maximum price a supplier can charge you for each unit of energy you use (the pence per kWh) and the daily standing charge to keep your property connected.

When you see headline figures like £1,663 or £1,723, these are simply illustrations. Ofgem calculates these figures by multiplying the capped unit rates and standing charges by the consumption of a typical medium-sized household. If you live in a large, poorly insulated house and run the heating constantly, you will use more than the typical 9,500 kWh of gas and 2,500 kWh of electricity, and your final bill will be higher than the cap.

Conversely, if you live in a small, well-insulated flat and use very little energy, your annual bill will be lower than the headline figure. The cap ensures you pay a fair price for the energy you use, but it does not protect you from high bills if your usage is high.

What are standing charges?

A standing charge is a fixed daily amount that you must pay to your energy supplier, regardless of whether you use any gas or electricity on that day. It is similar to a line rental fee for a telephone. Even if your property is empty and all appliances are switched off, the standing charges will still add up on your account.

These daily fees cover the fixed costs of providing energy to your home. This includes the physical maintenance of the pipes and wires that make up the energy network, the cost of reading and maintaining your meter, and the administrative costs of keeping your account open. A portion of the standing charge also goes towards funding government environmental and social schemes.

Under the current July to September 2026 cap, the combined daily standing charge for a dual-fuel home is around 86p a day, which works out to over £310 a year before you even turn on a light switch. From October, the electricity standing charge falls slightly while the gas standing charge rises, keeping the total combined daily cost roughly similar.

How your payment method affects your rates

The headline figures often quoted in the news are based on customers who pay by monthly Direct Debit. However, the exact unit rates and standing charges you pay will change depending on how you settle your bills.

Rates can differ by payment method, so compare the tariff available for your meter and how you pay. For example, households that pay upon receipt of a bill (standard credit) traditionally face slightly higher unit rates or standing charges to cover the supplier's additional administrative costs and the higher risk of late payment.

Customers using prepayment meters also have a specific set of rates under the price cap. Historically, prepayment customers paid a premium, but regulatory changes in recent years have aimed to bring prepayment costs more in line with Direct Debit rates. Always check the specific rates for your chosen payment method rather than relying solely on the national Direct Debit average.

Should you choose a fixed or variable tariff?

With the October price rise now confirmed, many households are weighing up whether to stay on a standard variable tariff or switch to a fixed deal. Around 35% of UK households, roughly 11 million homes, are currently on fixed tariffs. These customers are shielded from the upcoming increase in the standard variable unit rates.

A fixed tariff guarantees that your unit rates and standing charges will not change for the duration of the contract, which is usually 12 months. This provides peace of mind and makes it easier to budget for winter energy costs. If wholesale energy prices spike later in the year, your rates remain protected.

However, fixing comes with trade-offs. If wholesale prices fall and Ofgem lowers the price cap next year, you will be locked into your higher fixed rates unless you pay an exit fee to leave the contract early. Exit fees often apply per fuel, so leaving a dual-fuel fix early can cost a noticeable amount.

If you are considering a fix, you do not need to worry about missing out on the government's electricity VAT cut. Because the 0% VAT rate applies universally to domestic electricity bills from 1 October to 31 March, suppliers will automatically apply this discount to fixed-tariff customers too, lowering your final billed amount.

The impact of seasonal usage on your winter bills

While the 4% rise in the unit rates from 1 October is relatively small in percentage terms, the timing means households will feel a distinct impact on their finances. October marks the beginning of the traditional heating season, where energy consumption rises sharply as the weather turns cold and the days get shorter.

Because you pay for every unit of energy you use, combining the higher October unit rates with a steep increase in winter gas consumption will push monthly bills up noticeably. A household might use only a few hundred kilowatt-hours of gas in August for hot water, but several thousand in December to run the central heating.

If you pay by a fixed monthly Direct Debit, your supplier will usually smooth these costs out over the year, building up credit in the summer to cover the winter debt. However, if your summer credit is low, your supplier may need to increase your monthly payment amount to ensure you can cover the higher costs generated by the new October rates and your winter heating habits.

Grants and schemes to improve home efficiency

Lowering your unit rate is only one way to reduce energy costs; using less energy by improving your home's efficiency is often more effective in the long run. Several government schemes currently offer financial support to help households upgrade their insulation and heating systems.

The ECO4 scheme requires large energy suppliers to fund energy-saving measures, such as loft insulation and newer boilers, for low-income and vulnerable households. This current iteration of the scheme is scheduled to close on 31 December 2026. The government's £15 billion Warm Homes Plan includes grants and loans for home upgrades, but the help available depends on the scheme and household eligibility.^[1]

For households in England and Wales looking to move away from gas, the Boiler Upgrade Scheme provides upfront grants to help cover the cost of installing an air source or ground source heat pump. It offers up to £9,000 for eligible off-gas-grid homes replacing oil or LPG heating until 31 March 2027, and up to £7,500 for other eligible heat-pump installations.^[2]

To further encourage efficiency upgrades, the government has also applied a 0% VAT rate on the installation of energy-saving materials. This means that if you pay to have solar panels, a heat pump, or new insulation fitted before 31 March 2027, you will not pay any VAT on the materials or the installation labour.