What do the energy price cap predictions mean for you?
Getting to grips with your energy bills can be tricky, and with prices constantly changing, it's natural to wonder what's coming next. We want to help you get a clearer picture of how future energy prices are predicted.
Key takeaways:
The energy price cap forecast: Discover our price cap predictions for the next price cap and beyond (calculated using Ofgem’s updated Typical Domestic Consumption Values).
Compare our tariffs against the price cap: See how our current fixed and variable tariffs stack up against predicted cap changes.
What is the energy price cap? Learn about wholesale markets, network costs, the key drivers influencing prices, and more.
Frequently asked questions: Find out answers to common questions about price cap calculations and billing.
Our energy price cap predictions.
We're committed to giving you the information you need, when you need it, especially when it comes to making informed decisions about your energy use.
We predict the January price cap to be £2,1301, which is an increase of £407 compared to the October 2026 price cap. This latest forecast is based on our calculations.
If you’re a customer on our Next Pledge or Next Flex tariffs, prices remain uncertain. To help secure long term certainty, log in to your account or check out our latest fixed tariffs.
Responding to the price cap increase, Chris Norbury, CEO of E.ON UK, said:
"The latest increase in the energy price cap will worry customers who are already feeling the pressure, which is why the removal of VAT from domestic electricity bills is a welcome step. Targeted support and action to tackle growing energy debt must also form part of the solution, alongside the rapid deployment of Warm Homes Plan funding to help more households access the technologies and support they need.
"To sustainably lower bills, we must open up the benefits of flexible, connected technologies such as batteries and solar, which put people in control of their energy use and help lower bills now and in the future. That's how we can make new energy work and ensure no one is left behind."
What is the energy price cap forecast?
E.ON Next price cap predictions for 2026 using new typical consumption values (used from 1 July) 2,500 kWh/year for electricity and 9,500 kWh/year for gas.
From 1 July, Ofgem have updated the Typical Domestic Consumption Values (TDCV) to better reflect the fact that households are using less energy. Specifically 7% less electricity and 17% less gas compared to their last review (October 2023).1
Date | Price cap prediction | Change from previous price cap | Confidence level |
|---|---|---|---|
July 2026 | £1,663 | - | Confirmed |
October 2026 | £1,723 | +£60 | Confirmed |
January 2027 | £2,130 | +£407 | Lowest |
April 2027 | £2,211 | +£81 | Lowest |
July 2027 | £2,000 | -£211 | Lowest |
How do our tariffs compare with the energy price cap?
Our graph shows how our tariffs compare to the energy price cap - check it for the latest details. We update this graph every week to give you the most up to date comparisons.
Note: Illustrative graph updated once a week. Updated 12 October 2026.
Will the temporary 0% VAT rate impact upcoming predictions?
Under UK Government policy, VAT on domestic electricity will drop from 5% to 0% between 1 October 2026 and 31 March 2027. E.ON Next will automatically apply this 0% rate across all fixed and variable electricity tariffs. As part of our commitment to inform our customers, we encourage you to consider the upcoming Price Cap increase when determining the real-terms impact of this temporary VAT cut on your bill during that six-month window.
Should you choose a fixed tariff, Next Pledge, or the price cap?
Deciding between a fixed or a variable tariff? Which one you pick really depends on your specific needs.
Fixed vs variable tariffs.
A fixed deal could offer peace of mind by locking in your rates for a certain period and protecting you from sudden price spikes. Then again, if the price cap falls, you could miss out on potential savings. So, it’s really up to you – there isn’t a universal answer.
It's all about balancing the certainty of a fixed price against the flexibility of the price cap as the market changes. Of course, before you commit to anything, check out our current price cap predictions first. Compare our energy tariffs.
Beat the price cap with Next Pledge.
Our Next Pledge tariff guarantees energy prices stay below the Ofgem price cap, which could save you £50 based on average annual consumption.2 Next Pledge is always priced below the price cap, so you'll pay less than the standard variable rate.
The £50 saving is applied as a reduction on unit rates split across both electricity and gas (£25 saving per fuel) based on Ofgem average dual fuel customer. If you use less energy than this, you'll see a lower saving amount.
And if energy prices fall? Don’t worry, your rate automatically drops too. So you won’t need to switch or do anything yourself. However, if you do want to switch, you can change to another E.ON Next tariff anytime without paying in exit fees. It’s a £25 exit fee per fuel if you change supplier.
What do the energy price predictions mean for you?
Energy price predictions basically give you an idea of where energy market prices might head next. This information could help you plan how to manage your energy with better confidence. Just be aware that these predictions aren’t set in stone – think of them as a weather forecast but for energy prices.
If you want more certainty, it's always worth checking your online account for our latest fixed tariff deals. You can also learn about the current energy price cap, including standing charges and what the energy price cap means for customer types.
Switch and save even more!
Ofgem has just announced their new price cap of £1,723 from 1 October 2026.
You could save even more money with our new time of use tariff, Next Smart Saver. Featuring two cheaper off-peak periods of electricity a day, plus a super off-peak, and a peak period, you could get better bill control depending on when you use your electricity. T&Cs apply.
What is the energy price cap?
The government introduced the energy price cap in 2019 to protect customers on energy tariffs with standard variable rates. The energy regulator Ofgem calculates and sets the energy price cap to reflect industry costs. They review the price cap every three months. The price cap level is set for customers in England, Wales and Scotland. Retail energy prices in Northern Ireland are not subject to a cap.
It's important to point out that the price cap is not an actual 'cap' on your total bill. The more energy you use, the more you'll still pay. Learn more about the energy price cap.
What influences the energy price cap?
When deciding how the price cap should be set, Ofgem's decision is heavily influenced by several key factors.
Wholesale energy prices.
This is one of the biggest drivers. The cost that suppliers pay for gas and electricity on the wholesale market directly impacts what you pay for your home.
Network costs.
Unfortunately, there are costs associated with building, maintaining, and upgrading the infrastructure that transports energy to your home.
Operating costs.
There are also costs for suppliers to run their businesses, including things like customer service and billing.
Government schemes.
Certain government policies aimed at protecting consumers and achieving environmental goals are funded through our energy bills.
What drives energy prices up or down?
When it comes to what actually drives those energy prices higher or lower, there are some key factors at play.
Global gas prices.
International situations, like geopolitical tensions or disruptions to supply chains, can cause significant and rapid price swings in global energy markets.
Supply and demand.
If there's high demand for energy (for example, during a cold winter) but limited supply, prices tend to go up. Conversely, if supply is abundant and demand is low, prices might fall.
Renewable energy.
Then, there's the increasing role of weather dependent renewable energy sources like wind and solar. On a windy or sunny day, when renewables generate lots of power, wholesale electricity prices can dip. But when the opposite is true, our reliance on gas-fired power stations can push prices up.
Infrastructure around the country.
Think about the costs associated with building, maintaining, and upgrading our energy infrastructure. That's all the power plants, gas pipelines, and electricity networks. They're also factored into our energy bills.
Government and regulator decisions.
Ofgem plays a crucial part in setting the price cap and ensuring fairness. Government policies relating to energy, climate change, and consumer protection also have an impact on the costs that suppliers can pass on to customers.
What’s influencing energy prices at the moment?
There isn’t one reason for the increase in energy prices. It’s a combination of factors, with global gas availability at the centre.
To give you more clarity on the current situation, let our E.ON Next energy experts break it down for you:
The Middle East conflict: This has cut off most of the region’s gas production. While only about 20% of the UK’s gas comes directly from the Middle East, reducing the global supply drives up gas prices everywhere.
The ongoing Ukraine conflict: This means that European countries can no longer rely on Russian gas to fill the supply gap.
Lower gas storage levels: Because of these conflicts, the amount of gas stored for winter in the UK and Europe is reduced – effectively increasing future energy prices.
Gas effect on electricity prices: Although electricity prices haven't jumped as much as gas prices, because gas is used for power generation alongside renewable energy, it's had a knock-on effect on electricity prices.
The impact of temporary tax cuts: Although VAT has been temporarily removed from electricity bills, along with certain Government policy costs, it’s not enough to reduce bills overall – though bills would be significantly higher without them. Read our blog for more information on VAT cuts.
Keep an eye on our blogs and price cap page for up to date price cap news as it comes in.
Why do price cap predictions matter?
Understanding price cap predictions could help you in several ways, including:
1Managing your household budget.
Knowing about any potential shifts in energy prices could make it easier to plan ahead, helping you fine-tune your household budget more effectively.
2More knowledge, less stress.
Energy market headlines can feel overwhelming sometimes. Understanding what actually drives price cap forecasts can reduce uncertainty by increasing your awareness.
3Build smarter energy habits.
While price cap forecasts shouldn't be the only trigger for changing your energy habits, they could encourage you to explore ways of becoming more energy efficient. Check out our energy saving tips.
Get advice on what to do with your tariff if energy prices are rising and or on the fall.
How do the experts make their price cap predictions?
The experts are independent analysts and financial specialists that review the energy market and make informed predictions. Their process involves:
Assessing all the influencing factors we've just discussed, including supply and demand, global gas prices, and more.
Using complex models and historical data to make an educated guess about how these factors will likely impact wholesale energy costs in the coming months.
Applying Ofgem's price cap methodology (which accounts for wholesale costs, network costs, operating costs, and policy costs) to try and predict what the next price cap level could be.
It’s important to understand that these are just predictions. This means that the outcomes aren't guaranteed. The energy market is highly changeable and can be impacted by unforeseen events. As we mentioned, it's best to think of it like a forecast, just like the weather.
It's also important to distinguish between these analysts and Ofgem. As we mentioned, Ofgem is the official regulator for Great Britain. While they are transparent about the factors they consider and the methodology for setting the cap, they don't typically issue public predictions in the same way that independent analysts do. Their role is to set the actual cap, not to forecast it for others.
Browse Ofgem's official website to find more news and information on the price cap.
The price cap timing and review period explained.
The energy price cap works in set blocks of time, which Ofgem reviews every three months. This means each price cap applies for a fixed cap period. Plus, the rates you pay on a standard variable tariff can change when a new period begins.
The key review periods are:
1 January – 31 March
1 April – 30 June
1 July – 30 September
1 October – 31 December
If you’re planning your budget, check which cap period your current rates fall into. Keep an eye on the next review date to be first in the know if prices change again. It’s best to check Ofgem for the latest price cap announcement and news.
Seeking energy reassurance? We're here for whatever's Next.
Get control of your energy future with our Next Fixed 24m tariff. T&Cs apply.
Read more about the price cap and energy saving.
Staying informed on price cap and energy news is the best way to stay in control of your energy costs. Whether you want to see how current rates affect your monthly outgoings or fine-tune your energy use, we’ve got plenty of tools to help you make the right choice for your household.
Your FAQs about energy price cap predictions.
You'll find more useful information about the price cap and predictions in our FAQs. You can also stay up to date by following us on WhatsApp.
What are energy price cap predictions and why are they made?
The energy price cap sets the maximum suppliers can charge for energy. Predictions are made because Ofgem updates it quarterly. They help households anticipate future energy costs for better financial planning.
How accurate are energy price cap predictions?
Energy price cap predictions are just that - predictions. Longer-term predictions in particular are often uncertain due to the highly fluctuating energy market. While based on Ofgem's method, they fluctuate with wholesale energy costs, so view them as estimates, not guarantees.
What factors influence how energy price cap predictions are made?
The main factor is wholesale energy prices, driven by global events. Other influences include network, operating, and policy costs, VAT, and supplier allowances, all affecting the final cap calculation.
What is Ofgem's role in relation to energy price cap predictions?
Ofgem is the energy regulator for Great Britain and sets the price cap every three months, based on its official methodology reflecting supplier costs. Ofgem doesn't predict. Instead, independent analysts and experts forecast the price cap using Ofgem's rules.
Should I rely on energy price cap predictions for budgeting?
You should always use predictions with caution for budgeting. Your actual energy bill depends on various other factors too, including your personal energy use habits and payment method. The market is in a constant flux, so predictions are never precise.
Should I fix my energy or stay on the price cap?
Deciding between a fixed tariff and a variable one really depends on your specific needs. A fixed deal could offer peace of mind by locking in your rates for a period and protecting you from sudden price spikes. However, if the price cap falls, you might miss out on potential savings.
There isn’t a one size fits all answer. It’s all about balancing the certainty of a fixed price against the flexibility of the price cap as the market changes. However, before you commit to anything, check out our current price cap predictions.
Can I be charged more than the energy price cap?
It’s important to point out that the energy price cap isn’t a limit on your total bill. The price cap figure that changes each quarter is only an illustration of what the ‘average’ household might pay over a year.
Because the cap actually limits the unit rate and standing charge, your final cost depends on how much energy you use. If you use more than the average home, your bill will be higher, and vice versa.
To help you budget, it’s a good idea to educate yourself on the average UK energy bill and what it looks like for different property sizes. Being mindful of how much energy you use is still one of the best ways to keep costs down.
The legal bit.
1 Our predicted January 2027 price cap increase is based on dual fuel customers, paying by Direct Debit, who have medium energy usage as defined by Ofgem’s Typical Domestic Consumption Values (TDCV), (2,500kWh of electricity and 9,500kWh of gas per year). This is calculated using the Ofgem methodology to combine market prices and our forecast of other costs. Our current predictions as of 12 October 2026 is that the January Ofgem price cap is predicted to increase to £2,130. Our prediction will change based on the changes in the cost of wholesale energy for future periods. The projection should be used as a guide of the trajectory of the price cap change. Potential Ofgem reforms could change the accuracy of the predictions vs what they actually set.
2 Next Pledge is a 12-month fixed term tracker tariff with variable rates that are always lower in comparison to the Ofgem price cap, that applies to standard variable tariffs. £50 saving is applied as a reduction on unit rates split across both electricity and gas (£25 saving per fuel) based on Ofgem average dual fuel customer. Actual savings depend on usage and region. Payment by Direct Debit required. T&Cs apply. Tariff quoting time is based on 126,565 users across mobile, smart TV, tablet and desktop using a ranging of Operating Systems between January 1st and May 4th 2025.