The January 2027 energy price cap is forecast to rise by around 16%, taking a typical household's bill from £1,723 to about £1,999 a year. Cornwall Insight calls it the biggest rise since January 2023. Ofgem won't confirm anything until 25 November, but the forecasts are firm enough that it's worth knowing your options now.
Here's what's been forecast, why, and how to decide between fixing, waiting, and moving to a variable tariff that sits below the cap.
What the January 2027 price cap is forecast to be
Ofgem sets the cap every three months. The current one, covering 1 October to 31 December 2026, is £1,723 a year for a typical dual-fuel household paying by direct debit. The next one covers 1 January to 31 March 2027 and is due to be announced on 25 November 2026.
Cornwall Insight, the energy consultancy whose forecasts are the usual benchmark, published its latest figure on 30 September: £1,999 a year, up £276 or 16%. That's up from the £1,872 it was forecasting in late August. The big suppliers publish their own forecasts, and theirs are higher:
| Source | Forecast dated | January to March 2027 |
|---|---|---|
| Cornwall Insight | 30 September | £1,999 |
| British Gas | 1 October | £2,080 |
| E.ON Next | 5 October | £2,088 |
| EDF | 7 October | £2,083 |
Treat all of these as scenarios, not promises. The suppliers rate their own forecasts as low or very low confidence, and they've moved by £50 or more in a few weeks. In late September the supplier average was around £2,120; it has since drifted down while Cornwall's has gone up, so the two are converging somewhere between £2,000 and £2,100. Ofgem's number is the only one that counts.
Why bills are going up again
Cornwall Insight points to the conflict in the Middle East disrupting gas supplies to the UK and Europe. EU gas storage was only around 65% full at the start of September, the lowest for that time of year in 15 years, and wholesale prices hit a four-year high that month before easing back.
The bit that matters for your bill: Ofgem builds each cap from wholesale prices over a fixed "observation window". For the January cap, that window runs from 19 August to 17 November, so by mid-October it's well over half done. September's spike is already baked into the average. Even if wholesale prices calm down now, they'd have to fall a long way to drag the final number back.
What £276 a year actually means
Spread evenly, £276 is about £23 a month, or roughly £69 for the January to March quarter. In practice you use more energy in winter, so the real hit lands heavier in the colder months.
Cornwall Insight's modelled unit rates show where it comes from: electricity at about 30.3p per kWh (against 26.32p now) and gas at about 9.8p per kWh (against 7.97p now). That's roughly a 15% rise for electricity and 22% for gas, so if your home runs on gas central heating, you'll feel it most.
Electricity currently carries no VAT, but that relief ends on 31 March 2027 unless the government extends it. The suppliers' early forecasts for April don't agree on whether prices fall back, so don't assume spring brings relief.
Fix now, wait, or go variable?
There are three realistic options. Which suits you depends on how you'd feel if you guessed wrong.
Fix now
A fixed tariff holds your unit rates and standing charges for the whole term, so a cap rise doesn't touch you. The price cap doesn't apply to fixed deals, which means a fix can be priced below the cap, above it, or anywhere in between. The test to run is whether a fix beats the expected January cap for your usage, not just the October one.
The catch is that the good fixes have thinned out. When the October cap was announced in late August, the cheapest fix on the market was around 10% below it. By 8 October, MoneySavingExpert's top standalone fix was only 3% below the October cap (an 18-month deal), and the next best was 1.2% below (14 months). Both carry exit fees of £50 to £75 per fuel. Suppliers reprice quickly when forecasts move, so these numbers will have changed by the time you read this.
Wait for Ofgem
If you're on a standard variable tariff, you're already on the cap, and you can sit tight until 25 November and decide with the real number in front of you. The risk is simple: by then, the cheapest fixes may have been pulled or repriced upward.
Move to a variable tariff below the cap
Some suppliers price their variable tariffs a little under the cap. Octopus's Flexible tariff, for example, works out about £10 a year cheaper than the cap on average. There are also "tracker" tariffs that take a set discount off the cap for 12 months, though some of those carry exit fees. You stay exposed to the January rise, but you're not locked in for long, so you can move to a fix later if a good one appears. This suits you if you want flexibility more than certainty.
The exit fee question
Exit fees normally only apply if you leave a fixed deal before it ends. You can leave a standard variable tariff without a penalty.
If you're already on a fix, look up the end date and the exit fee on your account or your latest bill. Under Ofgem's rules, suppliers can't charge you an exit fee if you switch in the last 49 days of a fixed deal, and they have to write to you between 42 and 49 days before it ends. If your fix ends between now and the new year, that window is when to get a fresh quote, and it's worth putting the date in your calendar rather than waiting for the letter.
What to do this week
You don't need to decide today. You do need the information to decide quickly:
- Find your annual usage in kWh for gas and electricity, from your last bill or your supplier's app.
- Check what tariff you're on, when it ends, and whether there's an exit fee.
- Get two or three quotes and compare the unit rates and standing charges against both today's cap and a January cap of £2,000 to £2,100, not just the headline annual price.
- Put 25 November in the diary. That's when Ofgem confirms the number.
- If you're on a variable tariff without a smart meter, take a meter reading on or around 1 January so your supplier can split your bill between the old and new rates instead of estimating.
For the detail on October's rates and the VAT change, see our guide to the October 2026 energy price cap. For a worked example of the fix-or-stay maths, see whether to fix before an Ofgem price cap decision.
Tariff end dates, exit-fee windows and cap announcements are exactly the kind of dates that slip past. Keeping track of them is what The Home Concierge is built for.
If a fix beats the forecast January cap by a meaningful margin and you're comfortable being locked in, fixing is a reasonable bet. If the saving is thin or the exit fee is steep, waiting until 25 November costs you little. Either way, know your usage and your end date before the number lands.