October energy price cap announcement due this week: here's what to expect

When will the price cap be announced?

The price cap will be announced at around 7am on 26 August. There will then be just over a month before it comes into effect on 1 October.

It will be in force until 31 December, and the next price cap (announced at the end of November) will come into effect on 1 January 2027.

This could be the highest price cap since mid-2023

While we don’t know exactly how much the price cap will be, current predictions expect it to increase by around 3.7%. This would make it £1,725, which would be the highest it’s been since the summer of 2023 when it was set at £1,766.

You might see two different figures this week

When we report the price cap change, we report the annual figure that applies to a typical use household on a standard variable tariff paying by Direct Debit (e.g. £1,663). This more easily illustrates the increase or decrease of the cap.

However, Ofgem’s definition of “typical use” has changed to reflect households’ falling energy use. Previously, typical use was defined as 2,700 kWh of electricity and 11,500 kWh of gas per year. Now, it’s 2,500 kWh of electricity and 9,500 kWh of gas.

This meant that the current cap was originally announced at £1,862 per year under the old typical use definition, but soon afterwards was reported as £1,663 under the new definition.

You may see two different figures being reported this week. As previously mentioned, the cap is expected to go up by around 3.7% (according to suppliers’ average predictions). Under the old typical use definition, a 3.7% increase would be £1,931, but under the new definition, it would be £1,725.

And of course, these are just estimates at the moment - the actual figures announced on Wednesday could be different. It depends on which reports you read, but make sure you’re clear about which typical usage definition is being used and how it affects the headline figure.

Will the government announce any financial support for energy customers?

The government hasn’t confirmed whether it will offer any financial support for energy customers beyond the already-announced VAT cut on electricity, which comes into effect from 1 October. If it announces further support, details could come this week or around the time of the autumn budget on 28 October, in which case support could be more likely to come into effect when the next price cap comes into effect in January.