Energy bills for households are increasing slightly due to the implementation of the new Ofgem price cap starting today. For those paying via 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 and standing charges.
The price cap does not determine the total energy bill, which remains dependent on individual energy consumption. Customers not on fixed energy tariffs will be subject to the price cap. Additionally, the price cap for pre-payment meter users will increase from £1,707 to £1,711 yearly, while those paying upon receipt of the bill will see an increase from £1,890 to £1,894.
Updated every three months, the price cap is set to change again in April 2026. Despite a 2% or £37 decrease compared to the previous period, households are still facing higher energy costs. Consumer advocate Which? recommends considering switching to fixed tariffs to save money.
According to Which? energy editor Emily Seymour, with the impending slight increase in the energy price cap next year, households should explore deals below the current price cap without lengthy contracts or significant exit fees. Ofgem attributes the latest price cap rise to government policy and operational expenses, including funding for projects like Sizewell C nuclear 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 certain green levies. The Energy Company Obligation is set to conclude in March 2026, and contributions to the Renewables Obligation scheme will be reduced.
Most energy providers assure that fixed tariff customers will benefit from the savings. Energy experts predict the price cap to decrease to £1,620 in April 2026, representing a £138 reduction.
