Energy bills are set to increase slightly starting today with the implementation of the new Ofgem price cap. For households paying via direct debit, the annual energy bill is expected to rise from £1,755 to £1,758. This price cap regulates the maximum charges for gas and electricity unit rates, as well as standing charges.
Notably, the price cap does not establish a total cap on overall energy expenses, as the final bill is determined by individual energy usage. Those not on a fixed energy tariff will be subject to the price cap.
In parallel, the price cap for pre-payment meter users will see an increase from £1,707 to £1,711 annually, while those paying upon receipt of the bill will witness a jump from £1,890 to £1,894 per year.
Furthermore, the price cap undergoes revisions every quarter, with the next adjustment scheduled for April 2026. Despite the recent 2% decrease or £37 reduction compared to the previous period, households are advised by consumer advocate Which? to explore fixed tariffs to potentially save money.
According to Which? energy editor Emily Seymour, considering the approaching colder months and the slight uptick in the energy price cap, households should explore available deals below the price cap value, preferably for durations not exceeding 12 months and devoid of substantial exit fees.
Ofgem has attributed the latest price cap rise to governmental policy expenses and operational costs, including contributions towards initiatives such as the Sizewell C nuclear project and the Warm Home Discount scheme.
Chancellor Rachel Reeves announced in the November Budget that households could anticipate an average annual reduction of £150 in energy bills starting April 2026. This reduction is planned through the removal of various green levies from energy bills, with the Energy Company Obligation (ECO) concluding in March 2026 and a decrease in household contributions to the Renewables Obligation (RO) scheme.
Most energy suppliers have affirmed that customers on fixed tariffs will benefit from the expected savings. Analysts at Cornwall Insight project a potential drop in the price cap to £1,620 in April 2026, translating to a £138 decrease.