Energy bills are increasing slightly starting today with the implementation of the new Ofgem price cap. For households paying through direct debit, the annual energy bill will rise from £1,755 to £1,758. This price cap controls the maximum charges for gas and electricity unit rates and standing charges.
The price cap does not place a total limit on energy costs, as they still depend on individual usage for gas and electricity. Those not on a fixed energy tariff will fall under this price cap.
For customers using pre-payment meters, the price cap is moving up from £1,707 to £1,711 annually, while those paying upon bill receipt will see an increase from £1,890 to £1,894 per year.
This price cap is updated every three months, with the next adjustment scheduled for April 2026. Despite being 2% or £37 lower than the previous period earlier this year, households are still facing higher energy expenses overall. Which?, a consumer advocate, recommends considering a switch to a fixed tariff to save money.
According to Which? energy editor Emily Seymour, with the upcoming colder months, many households are worried about the slight increment in the energy price cap. She advises exploring deals below the current price cap, with contracts not exceeding 12 months and devoid of significant exit fees.
Ofgem, the energy regulator, attributes the latest price cap rise to government policy and operational costs, including funding for projects like Sizewell C nuclear plant and the Warm Home Discount scheme.
Chancellor Rachel Reeves announced in the November Budget that households can expect an average £150 reduction in energy bills starting April 2026 by eliminating certain green levies. The Energy Company Obligation (ECO) concludes in March 2026, and contributions to the Renewables Obligation (RO) scheme will be cut.
Most energy suppliers have confirmed the pass-through of savings from fixed tariffs to consumers. Energy analysts at Cornwall Insight predict the price cap to drop to £1,620 in April 2026, a decrease of £138.