Energy bills are increasing today with 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. The price cap regulates the maximum charges for gas and electricity unit rates along with standing charges.
The price cap does not impose a total limit on energy payments, as the amount still depends on individual energy consumption. Customers not on a fixed energy tariff will fall under the price cap.
For those using pre-payment meters, the price cap will increase from £1,707 to £1,711 annually, while those paying upon receipt of the bill will see their yearly charges go up from £1,890 to £1,894.
The price cap undergoes revision every three months, with the next change scheduled for April 2026. Despite being 2% or £37 lower compared to the previous period, households are still facing higher energy costs. Consumer advocate Which? advises switching to a fixed tariff for potential savings.
According to Which? energy editor Emily Seymour, with the upcoming colder months, households might be alarmed by the slight uptick in the energy price cap. Seymour recommends exploring deals below the price cap, with a focus on tariffs cheaper than the current cap, lasting no more than 12 months, and without substantial exit fees.
Ofgem attributes the recent price cap increase to government policy costs and operational expenses, including support for projects like Sizewell C nuclear and the Warm Home Discount scheme. Chancellor Rachel Reeves announced a £150 annual reduction in energy bills on average for households starting April 2026, achieved by eliminating certain green levies.
The Energy Company Obligation will conclude in March 2026, and contributions toward the Renewables Obligation scheme will be reduced. Most energy providers assure passing on the savings to customers on fixed tariffs. Energy experts predict the price cap to drop to £1,620 in April 2026, marking a £138 decrease.