Ofgem has announced a small increase in the energy price cap for the first quarter of 2026. The change will affect households on default tariffs across England, Scotland, and Wales.
Key Announcement
- Cap increase: From 1 January to 31 March 2026, the price cap will rise by 0.2%, adding around £0.28 per month for an average dual-fuel household.
- Annual bill impact: Typical annual bills for Direct Debit customers will be £1,758.
- Year-on-year comparison: Adjusted for inflation, this is 2% (£37) lower than the same period in 2025.
Why the Change?
The increase is driven by:
- Government policy and operating costs, including funding for projects like the Sizewell C nuclear plant (around £1/month).
- Wholesale energy prices, which have stabilised and fallen by 4% in the past three months, though global volatility remains.
Advice for Consumers
The price cap is a safety net, not necessarily the cheapest option. Ofgem recommends:
- Switching tariffs for better deals.
- Changing payment method: Moving from standard credit to Direct Debit could save around £136 annually.
- Prepayment remains the cheapest method, saving around £47 on average.
Support for Struggling Customers
Energy suppliers must provide:
- Tailored repayment plans.
- Financial assistance and debt advice.
Unit Rates and Standing Charges
- Electricity:
- 27.69p per kWh
- Standing charge: 54.75p/day
- Gas:
- 5.93p per kWh
- Standing charge: 35.09p/day
(Rates include VAT and are averages across England, Scotland, and Wales.)
Looking Ahead
Ofgem continues to work with government and industry to:
- Boost clean energy.
- Reduce reliance on international markets for energy security.
For full details, visit https://www.ofgem.gov.uk.