Ofgem Raises UK Energy Price Cap from January
Ofgem have announced that the energy price cap for households in Great Britain will rise by 0.2% from January to March 2026, 2% lower than the same period in 2025.
While at first glance this looks like a small adjustment, it’s worth unpacking what’s driving this change, and what impact it will have on typical household bills.
What Is the Price Cap and Who Does It Affect?
The energy price cap is a regulatory tool that restricts how much suppliers can charge per unit of gas and electricity, as well as the standing charge, for customers who are not on fixed-rate tariffs.
In other words, it’s a safety net, not a guarantee for low bills, but a way to prevent excessive charges.
For an average dual-fuel household paying by Direct Debit, the annual bill under the new cap will be £1,758, approximately, an extra 28 pence per month.
Households may be slightly better off this quarter than they were a year ago, though that’s cold comfort if energy costs are already squeezing budgets.
Why Is the Cap Going Up?
According to Ofgem, the increase isn’t being driven by wholesale energy prices, which have fallen, the key drivers are:
- Policy and operating costs
- Average household energy usage
- Support schemes, such as the Warm Home Discount
- Standing charge changes – Up 2% for electricity and 3% for gas
What Can Households Do?
If you want to limit the impact of this modest price cap rise, here are some practical steps:
- Shop around for different tariffs: You might find a better deal than your default variable tariff.
- Consider changing how you pay: Direct Debit or smart prepayment can lead to savings.
- Reach out to your supplier if you’re struggling: Suppliers are required to offer support, such as tailored repayment plans or debt advice.
If you’re worried about your energy bills, help is available. Find practical guidance to prepare your home for colder weather here.
Below are some trusted links to organisations offering free and practical help.