Energy bills are increasing slightly starting today due to the implementation of the new Ofgem price cap. For households paying through direct debit, the annual energy bill will rise from £1,755 to £1,758. The price cap regulates the maximum charges for gas and electricity unit rates and standing charges.

The total energy bill is still dependent on the actual usage of gas and electricity since the price cap does not impose a limit on the overall cost. Individuals not on a fixed energy tariff will fall under the price cap.

For customers using a pre-payment meter, the price cap is increasing from £1,707 to £1,711 annually. Meanwhile, those who pay upon receipt of the bill will see their yearly charge go up from £1,890 to £1,894.

The price cap undergoes updates every three months, with the next adjustment scheduled for April 2026. Despite the new price cap being 2% lower than the previous period, households are experiencing higher energy costs overall. Consumer advocate Which? recommends considering a fixed tariff switch to save money.

According to Which? energy editor Emily Seymour, households should explore deals below the price cap level, preferably without extensive exit fees and not exceeding a 12-month duration. Ofgem attributes the latest price cap increase to government policy expenses and operational costs, including funding for projects like Sizewell C nuclear plant and the Warm Home Discount scheme.

Chancellor Rachel Reeves announced in the November Budget that households can expect an average £150 annual reduction in energy bills from April 2026 by eliminating various green levies. The Energy Company Obligation (ECO) will end in March 2026, and contributions towards the Renewables Obligation (RO) scheme will decrease.

Major energy providers have assured that fixed tariff customers will benefit from the savings. Energy analysts at Cornwall Insight predict a price cap decrease to £1,620 in April 2026, amounting to a £138 reduction.