Martin Lewis has warned that the January 2027 energy price cap could rise by around 20% or more, as UK natural gas prices peak amid ongoing conflicts. The Money Saving Expert founder shared his insight on X, where commentators fear the UK may have reached "breaking point" due to the increases.
Price cap rise predicted
The energy price cap rose by 3.6% on October 1, from £1,663 to £1,723 a year for a typical dual-fuel household paying by Direct Debit. However, consultancy Cornwall Insight predicts a further increase of as much as 16% in January 2027, which would impact millions of households on standard variable tariffs.
This could see a typical dual-fuel household paying by Direct Debit pay £1,999 a year. Major suppliers like E.ON Next and British Gas have projected even higher averages between £2,065 and £2,080, according to Cornwall Insight.
Martin Lewis's warning
Lewis wrote to his 3.2 million followers: "The news over the weekend is cementing the likelihood of around 20% or bigger rises in the energy Price Cap in January."
He continued: "The graph shows UK natural gas prices (which strongly feeds into to our electricity price too) peaking again over the latest salvos in the Middle East and Ukraine conflicts. The dotted line and shaded area I've added into this Trading Economics graph show the assessment period for the January Cap (19 August to 17 November). It's averaged over that period, so we're now over half way through, and each high day bakes the average in higher."
The Trading Economics graph shows a steady rise between May and June before a slight dip in July. In August, the forecast rises again, then by September it shoots up over £204.07/thm.
Public reaction and next steps
Many British followers shared their concern as the post racked up 150,100 views in over 24 hours. One wrote: "Now compare it to the rest of the world! We [are] getting absolutely mugged off." Another chimed in: "Please stop calling it a Price Cap, it's anything but that." While a third commented: "So if you're already on £300PCM you'll be at £360PCM from January… The UK is absolutely fried!" And a fourth posted: "Martin this cannot happen. The British public are well past breaking point."
The next price cap change is due January 1, 2027, and it's predicted to rise again due to the ongoing conflict in the Middle East. The average price of the cap, based on typical use, has fluctuated since it was first introduced in 2019. No one paid the full amount under the price cap between October 2022 and June 2023, as prices were discounted under the Energy Price Guarantee (EPG) scheme.
To keep bills down, households can adjust boiler flow temperature to between 55°C and 60°C to save around 10% to 15% on gas, draught-proof homes to stop heat escaping, use radiator reflector foil on external walls, and lower the thermostat by 1°C to save around £90 to £100 per year.
