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Energy price cap update
Ofgem has unexpectedly raised the quarterly energy price cap by 0.2% for January–March, taking the typical dual‑fuel household cap to £1,758 a year from £1,755, an increase of roughly 28p a month and affecting more than 30 million households on standard variable tariffs and prepayment meters across England, Scotland and Wales.
“Ofgem has unexpectedly raised the quarterly energy price cap for January–March by 0.2%, taking the average dual-fuel household bill to £1,758 a year (up from £1,755) — about a 28p-a-month increase.”
Regulators and media outlets said the small rise takes effect from 1 January 2026 and applies to the unit rates and standing charges that underpin bills for households on default tariffs.
The regulator added that wholesale prices have fallen about 4% over three months but remain volatile, and the cap has nonetheless been nudged higher for the winter quarter.
Reasons for energy cap rise
Officials and analysts say small rises in standing charges, government policy costs and changes in calculation methods are the immediate drivers rather than a spike in wholesale energy prices.
Ofgem and multiple outlets noted that wholesale costs have been broadly stable and down about 4% over three months.
The cap rise reflects factors such as higher standing charges (electricity +2%, gas +3% cited by industry commentators), temporary costs linked to the Warm Home Discount and a change in how average usage is calculated for the typical household.
Energy consumer support measures
Regulator guidance and industry commentary emphasised consumer measures and support.
“Ofgem is urging customers to shop around and change how they pay to cut energy costs, saying about eight million households could save roughly £136 a year by switching from standard credit to direct debit.”
Ofgem urged people to shop around and switch payment methods and suppliers where possible.
It noted that around eight million households could save roughly £136 a year by moving from standard credit to direct debit.
Prepayment customers are saving about £47 on average.
The regulator also highlighted existing support schemes such as the £150 Warm Home Discount and energy-efficiency programmes.
It introduced rules requiring suppliers to offer tailored repayment plans, extra financial help and debt advice to struggling customers.
Responses to energy cap rise
Charities and Citizens Advice warned the small cap rise will make for another tough winter and urged the government to shift some policy costs onto general taxation and to invest in energy efficiency.
Opposition politicians blamed net-zero policies and green levies for putting upward pressure on bills.
Local campaigners highlighted the cumulative burden, saying average bills remain hundreds of pounds higher than previous winters and calling for Budget action to fund long-term measures to cut costs.
Energy bill outlook
Analysts warn the outlook could change in the spring.
“Analyst Cornwall Insight currently predicts bills will rise in April, mainly because of increased network operation and maintenance charges, though this forecast could change before the official announcement.”
Cornwall Insight currently predicts bills may rise in April because of higher network operation and maintenance charges, though forecasts could change before the formal April cap announcement, which Ofgem said it will publish by 25 February 2026.
Observers advised households to check tariffs, consider fixed deals and take accurate year-end meter readings to avoid bill surprises as seasonal usage rises.