How to cut your energy bill under the £1,723 price cap

From 1 October 2026 a typical British home on a standard variable tariff pays about £1,723 a year for gas and electricity, 4% more than in summer, and every January forecast published so far is higher. Gas did most of the damage: the capped unit rate went from 5.74p per kWh in April to 7.97p now. What follows is ordered roughly by how much each step is worth in an ordinary semi with a gas boiler, with the help that people most often miss near the end.

Start with how you pay

The cap is not one number. Direct Debit gets the standard rate, standard credit (paying when the bill arrives) costs more, and prepayment is currently the cheapest of the three: Ofgem said in August that prepayment customers pay about £45 a year less than Direct Debit for typical use. If you pay by cash or cheque when the bill lands, moving to Direct Debit is the quickest saving here and takes one phone call.

Do not move onto prepayment for the £45, though. When the credit runs out the heating goes off, and that is a bad trade in January.

Then look at the tariff

Ofgem said in late August that some fixes were £100 or more below the cap. Since then wholesale gas has risen and the gap has narrowed (our 2027 outlook has the latest figures), but a fix at or below the cap is still worth having if January goes up as forecast. Run a comparison with your real annual kWh, and judge deals on the annual cost including standing charges. Our bill guide shows where those figures are.

Mind the standing charge. The capped rates average 54.83p a day for electricity and 29.68p for gas, about £309 a year before you use anything. Ofgem has made suppliers offer lower standing charge tariffs, but as the regulator put it, it “cannot remove these charges, we can only move costs around”, so the unit rates are higher. They suit a low-usage flat or a house empty for months, not a family on typical use.

Time-of-use and smart meters

A smart meter in smart mode ends estimated bills, which is where a lot of overpayment hides, and it is the ticket to cheaper overnight electricity. If yours has stopped sending readings, ask your supplier to fix it.

With an electric car, a heat pump, a battery, or just a dishwasher and washing machine on timers, a time-of-use tariff can cut the electricity half of the bill. Octopus’s Intelligent Octopus Go, for example, advertises 8p per kWh for six overnight hours against the 26.32p capped average. Our home charging guide runs the numbers for EV owners.

Agile-style tariffs, priced half-hour by half-hour, are a different animal. Octopus’s own Agile page warns that with high wholesale prices you are likely to save more on a standard variable or fixed tariff through the winter. Believe it.

The boiler and the radiators

Turn the boiler’s flow temperature (the radiator setting, not the hot water one) down to about 60 °C. A combi sending 75 °C or 80 °C water to the radiators rarely condenses and wastes gas. Rooms take a little longer to warm but reach the same thermostat setting, and you can turn it back up in a cold snap.

Heat the rooms you use. Radiator valves at 2 or 3 in bedrooms and spare rooms, lower on the landing, living room on the thermostat. Bleed the radiators in October; a cold top half means air, not a broken valve.

Draught-proof before anything bigger: strips on doors and windows, a letterbox brush, a chimney balloon in an unused fireplace. Loft insulation to 270 mm remains the best-value larger job if the loft is thin.

If you have a hot water cylinder with an immersion heater, check it is off unless the boiler is broken. Heating water on daytime electricity is one of the dearest ways to do it.

Standby and appliances

At 26.32p per kWh, 100 W of always-on load (an old set-top box, a console in rest mode, a second fridge in the garage) costs about £230 a year. A plug-in meter costs under £15, and our appliance calculator turns watts and hours into pounds.

Help people miss

Warm Home Discount. £150 off the electricity bill, or added to a prepayment meter, for winter 2026 to 2027. In England and Wales it is usually automatic if, on 23 August 2026, you or your partner got a qualifying means-tested benefit such as Pension Credit, Universal Credit, Housing Benefit or income-related ESA. In Scotland you may need to apply to your supplier.

Winter Fuel Payment. Between £100 and £300 if you were born on or before 27 June 1960, mostly paid automatically in November or December. HMRC takes it back if your income is over £35,000. In Scotland the Pension Age Winter Heating Payment replaces it.

Cold Weather Payment. £25 for each 7-day spell when your area averages zero degrees or below, between 1 November 2026 and 31 March 2027, paid automatically to people on certain benefits in England and Wales. Scotland has its own Winter Heating Payment instead.

Priority Services Register. Free extra help from your supplier and network if you are over State Pension age, disabled, have a long-term health condition, are pregnant or have a child under 5: advance warning of power cuts, bills in large print or braille, help reading the meter. You join through your supplier or your electricity network.

Hardship funds. If you are already in debt, several large suppliers run funds that can clear part of it, including British Gas, EDF, E.ON Next, Octopus, Ovo and Scottish Power, according to Citizens Advice. The British Gas Energy Trust gives grants to customers of any supplier once you have spoken to a debt adviser.

Bigger jobs and the grants behind them

The Warm Homes Plan puts money into free upgrades for low-income households, delivered in England through the Warm Homes: Local Grant via councils, for owner-occupiers and private tenants in homes rated EPC D to G. Set expectations: by the end of June 2026 about 5,100 households had been upgraded, most often with solar panels. Ask your council what it is running. ECO4, the older supplier scheme, closes on 31 December 2026 with no successor.

If the boiler is on its last legs, the Boiler Upgrade Scheme pays £7,500 towards an air or ground source heat pump in England and Wales, plus an extra £1,500 until March 2027 for homes on oil or LPG. Whether a heat pump beats gas on running cost depends on the tariff and the house; our heat pump calculator uses the October cap rates so you can test your own figures.

The VAT cut

From 1 October 2026 to 31 March 2027 there is no VAT on domestic electricity in Great Britain, worth about £45 a year to a typical home. It applies to every tariff, fixed or variable, so you do not need to do anything. Gas still carries 5%.

Where the money really is

The payment method and a sensible fix are worth tens to a couple of hundred pounds; the boiler and heating changes about the same again in a gas-heated house; the Warm Home Discount and Winter Fuel Payment add up to several hundred for those who qualify. Almost all of it starts with knowing your real usage in kWh.