Energy bills are increasing slightly starting today due to the implementation of the new Ofgem price cap. For households paying via 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 as well as standing charges.
The price cap does not establish a total limit on energy payments, so the amount you pay still depends on your energy consumption if you are not on a fixed tariff. For individuals using pre-payment meters, the price cap is increasing from £1,707 to £1,711 per year, while those paying upon receipt of the bill will see an increase from £1,890 to £1,894 annually.
The price cap is reviewed 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 paying significantly more for energy. Which? advises consumers to explore fixed tariff options to save money.
According to Which? energy editor Emily Seymour, as the colder months approach, many households may be concerned about the slight increase in the energy price cap. She recommends seeking deals below the current price cap, with terms not exceeding 12 months and minimal exit fees.
Ofgem stated that the recent price cap hike was driven by government policy expenses and operational costs, including contributions towards projects like Sizewell C nuclear plant and the Warm Home Discount scheme. In the November Budget, Chancellor Rachel Reeves announced an average £150 annual reduction in energy bills for households from April 2026 by eliminating green levies.
The Energy Company Obligation (ECO) is set to conclude in March 2026, and households’ payments towards the Renewables Obligation (RO) scheme will be decreased. Most energy providers have confirmed passing on the savings from fixed tariffs. Analysts predict a price cap drop to £1,620 in April 2026, representing a £138 reduction.