Energy bills are increasing slightly starting today due to 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 regulates the charges for gas and electricity unit rates as well as standing charges.
The cap does not impose a total limit on energy expenses, as the bill amount is still influenced by individual energy consumption. Those not on a fixed energy tariff will fall under the price cap.
For customers using pre-payment meters, the price cap is rising from £1,707 to £1,711 annually, while those paying upon receipt of bills will see an increase from £1,890 to £1,894 per year. The price cap undergoes updates every three months, with the next change scheduled for April 2026.
Despite being 2% or £37 lower than the previous period earlier in the year, households continue to face higher energy costs. Consumer advocate Which? recommends exploring fixed tariff options to save money, as there are deals available below the price cap threshold.
Ofgem attributes the latest price cap adjustment to government policy expenses and operational costs, including support for projects like Sizewell C nuclear facility and the Warm Home Discount program. Chancellor Rachel Reeves announced in the November Budget that households can expect an average annual energy bill reduction of £150 starting April 2026 by eliminating various green levies.
The Energy Company Obligation (ECO) is set to conclude in March 2026, with reduced contributions from households towards the Renewables Obligation (RO) scheme. Most energy providers assure that savings from these changes will be passed on to customers on fixed tariffs. Energy market analysts project a drop in the price cap to £1,620 in April 2026, representing a £138 decrease.
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