Energy bills are increasing slightly starting today due to the implementation of the new Ofgem price cap. For households that pay through direct debit, the annual energy bill will rise from £1,755 to £1,758. This cap governs the maximum charges for gas and electricity unit rates and standing charges.
The price cap does not impose a total limit on energy payments, so the bill remains dependent on individual energy usage unless on a fixed tariff. Those using pre-payment meters will now face an annual cap increase from £1,707 to £1,711, while those paying upon receipt of bills will see their charges go up from £1,890 to £1,894.
This cap is subject to regular updates every three months, with the next change scheduled for April 2026. Despite being 2% or £37 lower than the same period last year, households are still paying significantly more for energy. Consumer advocate Which? recommends exploring fixed tariffs to save money.
Ofgem attributes the latest price cap hike to government policy and operating costs, including support for projects like Sizewell C nuclear power and the Warm Home Discount scheme. Chancellor Rachel Reeves, in the November Budget, announced an average £150 annual energy bill reduction starting April 2026 by removing green levies.
The Energy Company Obligation will conclude in March 2026, and contributions to the Renewables Obligation scheme will decrease. Most energy suppliers assure that savings from these changes will benefit customers on fixed tariffs. Analysts forecast the price cap to decrease to £1,620 in April 2026, saving consumers £138.
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