Electricity averages 26.32p/kWh as VAT comes off October bills

Ofgem's price cap rises 4% for a typical dual-fuel household paying by Direct Debit from 1 October to 31 December 2026, but electricity bills stay broadly stable: on a default tariff paid by Direct Debit the average electricity rate is 26.32p per kWh with a 54.83p daily standing charge, and VAT has been removed. Ofgem says most of the rise comes from gas, and households that don't use gas will see an increase of less than 1%. (Ofgem) THRIVE's real cost to charge data compares home charging with the HMRC advisory electric rate.

Ofgem points to higher wholesale gas prices, caused by the ongoing conflict in the Middle East, as the driver - a reminder that EV running-cost advantages are hostage to gas markets as much as petrol is to oil. The VAT removal on electricity bills runs from 1 October 2026 to 31 March 2027, and Ofgem says the published cap figures already include it. Ofgem will confirm the next cap, for January to March 2027, by 25 November 2026. (Ofgem)

Why this matters: Re-run your pence-per-mile comparisons for Q4 using 26.32p per kWh, especially for fleets reimbursing drivers on home-charging schemes tied to the cap. The 26.32p rate already reflects the VAT removal, so don't apply a further saving on top, and Ofgem notes costs cannot be compared directly to previous periods because of the change.