The Ofgem price cap limits how much you can be charged for unit rates of gas and electricity, as well as the standing charges
Energy bills are rising slightly from today as the new Ofgem price cap comes into force.
The typical household that pays by direct debit will see their annual energy bill increase from £1,755 to £1,758 a year. The price cap limits how much you can be charged for unit rates of gas and electricity, as well as the standing charges.
It does not set a total cap on how much you can pay for energy, so your bill still depends on how much gas and electricity you use. You will be on the price cap if you are not on a fixed energy tariff.
The price cap for someone paying by pre-payment meter is rising from £1,707 a year to £1,711 from today, and the yearly charge for someone who pays on receipt of bill is going up from £1,890 a year to £1,894.
The price cap is updated every three months, so it will change again in April 2026.
The new price cap is 2% or £37 lower than the same period earlier this year – but households are still paying much more for energy than they used to. Consumer champion Which? has urged people to consider switching to a fixed tariff to save money.
Which? energy editor Emily Seymour said: “As we head into the coldest months of the year, many households will be concerned that the energy price cap will increase slightly in the new year.
“There are several deals on the market for lower than the price cap so now is a good time to shop around if you’re looking to fix. As a rule of thumb, we’d recommend looking for deals cheaper than the current price cap, not longer than 12 months and without significant exit fees.”
Energy regulator Ofgem said the latest price cap increase was driven by government policy costs and operating costs, including funding the Sizewell C nuclear project and the Warm Home Discount scheme.
In her Budget in November, Chancellor Rachel Reeves said households will see their energy bills cut by £150 a year on average from April 2026. This will be done by removing various green levies from bills.
The Energy Company Obligation (ECO) is ending in March 2026 and the amount households pay towards the Renewables Obligation (RO) scheme will be reduced.
Most energy providers have confirmed that those on fixed tariffs will still see the savings passed on to them. Energy analysts at Cornwall Insight predict the price cap will fall to £1,620 in April 2026, a reduction of £138.