Ofgem's price cap rises 4% from 1 October, to £1,723 a year. But gas and electricity didn't move together: electricity is nearly flat, gas is up 8%. That gap narrows the "spark spread", the price ratio between electricity and gas, from 3.56x to 3.30x. This is the number that decides whether a heat pump beats a gas boiler on running cost, and it's moving in the heat pump's favour.
What's actually changed
From 1 October to 31 December, the average unit rates move like this:
- Electricity: 26.11p/kWh to 26.32p/kWh, up under 1%
- Gas: 7.33p/kWh to 7.97p/kWh, up 8%
Electricity should have risen too. Wholesale prices are up across the board. It didn't, because the government removed VAT from domestic electricity bills this quarter, which absorbed most of the increase. Ofgem estimates that without the VAT cut, the typical bill would be around £45 higher. Gas had no such offset, so the wholesale rise, driven by the conflict in the Middle East, went straight through.
We flagged this VAT change back in July, when we could only estimate what October's rate would do. Today's confirmed numbers land close to that estimate, and the underlying trend is the same: electricity and gas prices are diverging.
The number that comes out of that divergence is the spark spread: how many times more expensive electricity is than gas, per kWh. This quarter it narrowed from 3.56x to 3.30x. Electricity got about 7% cheaper relative to gas. That number decides whether a heat pump costs more or less than a gas boiler to run.
If you're on gas
Your bill is going up 8% regardless. The reason is worth knowing: you're exposed to wholesale gas prices, which move with global politics, while electricity is being propped up by the VAT change and isn't moving the same way.
The narrowing spark spread matters more than the headline cap rise. A heat pump needs to beat that 3.30x ratio in efficiency to cost less to run than your boiler. A well-designed system, sized off an actual heat loss survey rather than a rule of thumb, runs at a SCOP of 3.5 to 4. At today's spread, that system already beats a gas boiler on running cost, and the margin grows every time this gap narrows further.
Gas still sets UK electricity prices roughly 60% of the time, which is a structural problem we've covered before. Today's cap doesn't fix that. It just shows the direction things are moving, and that direction favours electric heating.
If you're on oil or LPG
None of the above applies to you. Oil and LPG sit outside the price cap. There's no regulator and no ceiling on what suppliers can charge.
Kerosene has gone from 32p a litre to £1.20 a litre in the past few years, a rise of about 275%, with no cap to slow it at any point. If you're on oil, you've absorbed that swing directly, on top of paying more per kWh than gas customers already do.
The government's response has been to raise the Boiler Upgrade Scheme grant to £9,000 for oil and LPG households, up from £7,500, running from 21 July 2026 to 31 March 2027. It's the biggest single lever available if you want off oil before the next price spike.
What this means for running costs if you switch
Take a typical 3-bedroom semi with 11,500 kWh of annual heat demand, the same household we've used in previous price cap breakdowns, and run it against this quarter's confirmed rates:
- Gas boiler (85% efficient): 9.4p per kWh of delivered heat, around £1,079 a year
- Oil boiler (85% efficient, at £1.20/litre): 13.6p per kWh of delivered heat, around £1,564 a year
- Heat pump (4.0 SCOP): 6.6p per kWh of delivered heat, around £757 a year
On today's numbers, that's roughly £322 a year cheaper than gas, and £807 a year cheaper than oil, for heating alone. Those figures hold only if the heat pump hits that 4.0 SCOP. A system sized off guesswork rather than an individual heat loss survey won't get there, and the running-cost advantage disappears. The survey matters as much as the install.
At Heat Geek, every install starts with a full heat loss survey and is designed to run at low flow temperatures, targeting a specific SCOP rather than hoping for one. Our ZeroDisrupt™ approach keeps install costs down without cutting corners on that efficiency.
What this looked like for one homeowner
Ross, in Camelford, North Cornwall, was on oil. No gas main out there, so it was oil or LPG from day one. He watched his oil price triple and his annual spend hit £1,500 a year, with no cap and no way to plan around it.
Heat Geek ran a full heat loss survey on his property. The number that came back: £200 to install a heat pump, once the raised £9,000 grant was applied. He upgraded to the Plus unit for the extra warranty, which brought the all-in cost to around £530, still less than one year of his old oil bill.
No carpets lifted, no radiators replaced. Heat Geek filled in the grant paperwork; he signed it. He already had solar and battery storage installed, so once the heat pump was in, he expected to generate most of what he'd use.
Get a heat pump that actually earns these savings
Today's cap rise is a headline. The spark spread narrowing behind it is the number that tells you whether switching makes sense, and by how much, whether you're comparing against gas or getting away from oil.
The only way to know your own number is a proper heat loss survey. Get an Instant Estimate
Why Heat Geek?
Heat Geek is the UK's leading platform for high-performance heat pump installs. We design systems that meet, and often exceed, the technical rigour of the Future Homes Standard, so you get the same low running costs promised to new-build buyers, in the home you already live in.
