Energy bills are set to increase slightly starting today due to the implementation of the new Ofgem price cap. For households paying through direct debit, the annual energy bill will go up from £1,755 to £1,758. The price cap governs the maximum charges for gas and electricity unit rates and standing charges.
The price cap does not establish a total limit on energy payments, as bills are still influenced by individual energy consumption if not on a fixed tariff. For those using pre-payment meters, the price cap rises from £1,707 to £1,711 annually, while for bill payment recipients, it increases from £1,890 to £1,894 per year.
The price cap undergoes revisions every quarter, with the next change scheduled for April 2026. Despite the new price cap being 2% or £37 lower than the previous period, households continue to face higher energy costs. Consumer advocate Which? advises considering a switch to a fixed tariff for potential savings.
According to Which? energy editor Emily Seymour, as winter approaches, households may be concerned about the slight increase in the energy price cap. Seymour recommends exploring deals below the current price cap without extended contract durations or substantial exit fees.
Ofgem attributes the latest price cap adjustment to government policy expenses and operating costs, including support for projects like Sizewell C nuclear and the Warm Home Discount scheme. In the recent Budget, Chancellor Rachel Reeves announced an average annual reduction of £150 in energy bills for households from April 2026 by eliminating certain green levies.
With the conclusion of the Energy Company Obligation in March 2026 and reduced contributions to the Renewables Obligation scheme, households are expected to benefit. Most energy suppliers have confirmed passing on these savings to customers on fixed tariffs. Energy analysts anticipate a drop in the price cap to £1,620 in April 2026, resulting in a £138 reduction.