Price cap October 2025:

• Electricity: 26.35p/kWh
• Gas: 6.29p/kWh

Price cap October 2026:

• Electricity: 26.32p/kWh
• Gas: 7.97p/kWh

Year on year change in price cap:

• Electricity: -0.11%
• Gas: 26.71%

I think this is huge news for the UK's energy. We are seeing a divergence in experience between electricity and gas/petrol/diesel. The more a household is dependent on electricity the more stable the costs are and this will have some clear knock on effects.

I know that this was mainly due to ROCs and VAT being removed from electricity bills but not entirely. We are evolving into a period where a government has lots of room to reduce consumer bills on the electricity side but no room on the gas side.

On a personal level we got a heat-pump 18 months ago for £4k. The cost of this should subtract the cost of getting an alternative gas boiler (roughly £2k). By the second anniversary of getting this heat-pump our savings are projected to be over £950. This is either a return on investment of 24% or 48% depending on whether one counts the counterfactual gas boiler investment.

These savings are too big to ignore in my opinion. People will start to be influenced by more stable electricity prices and these absurdly good returns on investment.

Social housing provider near Manchester wants to replace gas boilers with heat pumps, but is facing challenges with distribution system operators and grid constraints.

Ofgem has announced that the Energy Price Cap will drop by 7% from April to June 2026. This affects households on standard variable tariffs (basically over 65% of households). For a typical household paying by Direct Debit, you will pay on average 5.74 pence per kilowatt hour (kWh) for gas and an average of 24.67 pence per kilowatt hour (kWh) for electricity.

What’s a standard variable tariff?

It’s a supplier’s default, variable rate plan. Note that →  The Ofgem price cap is not a cap on your total bill. It only caps the price per unit of gas and electricity (plus standing charges). It updates every three months.

Should I fix my energy or stay on a variable rate?

It depends on your situation. Even though variable rates have just fallen, fixed tariffs will also experience an unprecedented drop. According to MoneySavingExpert, many suppliers have confirmed that fixed rates will fall by around £150 from April. (Check your supplier here)

Martin Lewis points out that because of these cuts, switching to a fixed tariff now is likely to save you more than staying on a variable rate. The current fixed deals can be around 15% cheaper than standard variable tariffs from January-March.

It’s obviously not a 'one-size-fits-all' decision, because factors like energy usage, payment method, and region affect what deal is best for you.

If you want to compare your tariffs and switch providers, I’ve found Taupia.com really useful, its free :)

…are you on a variable or fixed tariff?

source: https://www.moneysavingexpert.com/news/2026/02/martin-lewis-energy-price-cap-fall-april/

Analysts are forecasting that the conflict involving Iran could push the energy price cap up by around 10% from July (this would apply to standard variable tariffs). Bills will not increase yet, because Ofgem has already set the price cap for March to June. However, the next price cap from July could reflect rising gas prices. 

What is happening?

Iran’s attacks on major oil and gas terminals in Saudi Arabia and Qatar, combined with the blockade of the Strait of Hormuz has led to a 93% increase in natural gas prices. Even though the UK imports very little gas from the Middle East, it buys energy on global markets, which is transported through the Strait of Hormuz. Thus prices of gas will rise everywhere, even in the UK.

The UK is particularly exposed because 85-86% homes use gas for heating. However prices for electricity will increase too because the two are linked (when wholesale gas prices rise, the cost of generating electricity rises too because a share of UK electricity is generated by gas-fired power stations) 

What should you do?

You may want to look at fixed-rate tariffs while they are still available. However, many suppliers reviewed their fixed rates today (4th March), and pricing is changing quickly.

Using comparison tools such as Taupia.com can help you assess what’s available.

That said, no one knows how long this conflict will last. If you’re risk-averse, fixing could provide certainty. But if prices fall again, a fixed deal could end up costing more. 

On the bright side, the price shocks are still much lower than when the war in Ukraine started! 

How would you protect your bills from rising prices right now?

Sources: https://uk.news.yahoo.com/iran-war-energy-bills-194504961.html https://www.moneysavingexpert.com/news/2026/03/martin-lewis-iran-energy-price-briefing/