UK energy price cap to rise by 0.2% from January
Energy regulator Ofgem has announced a 0.2% rise in the energy price cap for the period covering January to March 2026.
This change amounts to a small increase of around 28 pence a month for the average dual fuel household. Year on year when adjusted for inflation, the new cap is 2% or £37 lower than the same period in 2025.
The price cap refers to the default tariff applied when a customer is not on a fixed-rate tariff. It sets a maximum rate per unit anda standing charge that can be billed to customers for their energy use.
For an average household paying by Direct Debit for gas and electricity, the overall bill will be £1,758 per year.
“While energy prices have fallen in real terms over the past two years, we know people may not be feeling it in their pockets,” said Tim Jarvis (Director General Markets at Ofgem).
“The price cap helps protect households from overpaying for energy. But it’s only a safety net, and there are practical ways that customers can pay less for their energy.”
Jarvis encouraged consumers to look at different tariffs and choose what’s right for them or change the way they pay to Direct Debit or smart pay-as-you-go. Prepayment remains the cheapest way to pay, and these customers are already saving around £47 on average, he said.
“While wholesale energy costs are stabilising, they still make up the largest portion of our bills, which leaves us open to volatile prices. That’s why we’re working with government and industry to boost clean energy and reduce our reliance on international sources we can’t control.”
Changing payment methods from standard credit to Direct Debit can help reduce costs. Currently, eight million customer accounts pay by standard credit but could be making savings of around £136 with one simple switch.
Ofgem has introduced rules to ensure anyone struggling with their bills gets the help they need from their supplier and encourages customers to reach out for support if needed.
That could include tailored repayment plans, which can help households regain control and avoid falling further behind, or routes to financial assistance and debt advice.
