Energy price cap will rise by 0.2% from January

Energy regulator Ofgem has today (Friday 21 November) announced a 0.2% rise of 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 and 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.  

Tim Jarvis, Director General, Markets, at Ofgem, said:  

“While energy prices have fallen in real terms over the past two years, we know people may not be feeling it in their pockets.  

“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.  

“Look at different tariffs and choose what’s right for you or change the way you 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. 

“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 8 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. 

Notes to editors 

1. Wholesale prices – which make up the largest portion of the bill - are currently stable and have fallen by 4% over the past three months. However, unpredictable global events leave us open to volatility and prices could change. Building a clean energy system now means we can move away from markets beyond our control to boost energy security and stability. 
    
2. The price cap change is driven by government policy costs and operating costs. This includes funding government’s Sizewell C nuclear project (around £1 per month) which will bring more clean power. 
    
3. We have also today made a decision to update our technical input for typical consumption, which will add 75p per month to operating costs. The benchmark is used to set the price cap and is based on average energy usage for a typical, dual fuel domestic customer. This will be revised to reflect current customer usage and ensure suppliers can recover fair and accurate energy costs. 
    
4. Other factors include temporary costs associated with the extension of the Warm Home Discount (WHD) scheme (around 57p per month). We have chosen to spread these costs over a longer period to help keep bills more stable. The WHD and forthcoming Debt Relief Scheme are important steps to reduce the costs of bad debt (which we all pay for) by focusing support on people struggling to pay their bills and with historical debts from the energy crisis.
5. For any queries relating to government’s Warm Home Discount or Nuclear Rab (Sizewell C), please contact the Department of Energy Security and Net Zero. 
    
6. Standing charges are set to rise by 2% for electricity and 3% for gas. This is driven by changes in costs associated with the Warm Home Discount Scheme, which will provide support for around 2.7million more households this winter. It adds a total of approximately 2p per day to standing charges. 
    
7. Read more information on the Debt Relief Scheme.
    
8. Overall number of domestic customer accounts on Standard Variable Tariffs (SVT) – ‘around 34 million’ of which:   

• new no. of SVT Direct Debit accounts – ‘around 19 million’
• new no. of SVT Standard Credit accounts – ‘around 8 million’   
• new no. of SVT PPM accounts – ‘around 6 million’ 

Total number of domestic customer accounts on fixed tariffs ‘around 21 million’.