Energy bills are increasing slightly starting today with the implementation of the new Ofgem price cap. For households paying via direct debit, the annual energy bill will see a rise from £1,755 to £1,758. The price cap governs the maximum charges for gas and electricity unit rates along with standing charges.
The price cap does not impose a total limit on energy costs, which still vary based on individual consumption. Individuals not on a fixed energy tariff will fall under the price cap.
For those using pre-payment meters, the price cap is climbing from £1,707 to £1,711 annually, while the yearly charge for bill payment on receipt is increasing from £1,890 to £1,894.
This price cap is revised every three months, with the next adjustment scheduled for April 2026. Despite being 2% or £37 lower compared to the same period last year, households continue to face higher energy expenses. Consumer advocate Which? advises considering a switch to a fixed tariff for potential savings.
Ofgem attributes the recent price cap rise to government policy and operational expenses, including contributions to projects like Sizewell C nuclear and the Warm Home Discount scheme. Chancellor Rachel Reeves announced in the November Budget that households can expect an average annual energy bill reduction of £150 from April 2026 by eliminating various green levies.
The Energy Company Obligation is set to conclude in March 2026, and household contributions to the Renewables Obligation program will be diminished. Most energy providers assure that fixed tariff customers will benefit from these reductions. Cornwall Insight’s energy analysts forecast a drop in the price cap to £1,620 in April 2026, marking a £138 decrease.