Money App News: Energy Cap Forecast Hits £1,729

Two numbers landed on 19 August that between them decide what your budgeting app shows next quarter and what your savings app needs to pay. One is the near-final read on the October energy cap. The other is the inflation figure your interest rate now has to clear.

The final forecast for October’s energy cap is £1,729

Cornwall Insight published its final forecast for the October to December price cap on 19 August, calculated from close of play figures on 18 August, the last day of Ofgem’s observation window. It puts the cap at £1,729.31 a year for a typical household on direct debit, made up of £866.63 for electricity on 2,500 kWh and £862.68 for gas on 9,500 kWh. The current cap, for July to September, is £1,663 under the same consumption values. That is a rise of about £66, or four per cent. The forecast includes the VAT reduction on electricity that the government announced on 21 July. Ofgem confirms the actual figure by 26 August.

Two practical things follow. First, if you pay by monthly direct debit, your supplier will recalculate in the autumn and the increase will show up as a higher monthly figure rather than a bigger quarterly bill, which is exactly the kind of change a budgeting app catches and a bank statement does not. Now is a sensible time to check your app is categorising energy correctly, because a direct debit that quietly climbs is the classic thing people notice in January. Second, the cap is a cap on unit rates, not a cap on your bill, so a fixed deal below the projected cap is worth comparing rather than assuming the cap is the cheapest option. Our best bill switching apps covers the tools that do that comparison for you, and best budgeting apps in the UK covers keeping track once the number moves. The forecast is at Cornwall Insight.

Inflation at 2.9% raises the bar your savings app has to clear

The same day, the ONS reported that CPI rose 2.9 per cent in the 12 months to July 2026, up from 2.6 per cent in June. The largest upward push came from housing and household services, and the ONS points straight at the higher gas and electricity prices that followed July’s cap change. CPIH was 3.1 per cent.

That number is the hurdle, and outside an ISA the hurdle is higher than it looks, because you keep the interest after tax rather than before it. To match 2.9 per cent after basic rate tax you need roughly 3.63 per cent gross. After higher rate tax you need roughly 4.83 per cent. The Personal Savings Allowance covers the first £1,000 of interest for a basic rate taxpayer and £500 for a higher rate taxpayer, which sounds generous until you notice that at 4 per cent it is used up by about £25,000 of savings, and additional rate taxpayers get nothing at all. Anything above that line is taxed, and that is the point at which a cash ISA app stops being a matter of preference. Our savings app interest and tax guide explains where you cross it, the savings interest tax calculator does the sum for your balance, and best cash ISA apps covers the wrappers worth using. The bulletin is at the ONS.