Energy bills are increasing slightly starting today as the new Ofgem price cap takes effect. For households paying by direct debit, the annual energy bill will rise from £1,755 to £1,758. This cap regulates the maximum charges for gas and electricity unit rates and standing charges.
The price cap does not impose a total limit on energy expenses, which still depend on individual usage for those not on a fixed tariff. For users with pre-payment meters, the price cap is increasing from £1,707 to £1,711 per year, while for those paying upon receipt of the bill, it will rise from £1,890 to £1,894 annually.
This price cap is reviewed every three months and will be adjusted again in April 2026. Despite being 2% or £37 lower than the previous period, households are advised by consumer watchdog Which? to explore fixed tariffs to save money.
According to Which? energy editor Emily Seymour, with the approaching colder months, many households may be concerned about the slight increase in the energy price cap. Several deals are currently available below the price cap, making it a good time to consider switching. Ofgem attributed the latest price cap rise to government policy costs and operational expenses, including support for projects like Sizewell C nuclear and the Warm Home Discount scheme.
Chancellor Rachel Reeves announced in the November Budget that households could expect an average annual energy bill reduction of £150 from April 2026 by eliminating certain green levies. With the end of the Energy Company Obligation in March 2026 and reduced contributions to the Renewables Obligation scheme, savings are expected to be passed on to fixed tariff customers by most energy providers.
Analysts at Cornwall Insight forecast a drop in the price cap to £1,620 in April 2026, a decrease of £138.