Price cap increase adds £20 to typical annual energy bill
Energy bills have risen slightly from today as Ofgem’s latest energy price cap takes effect, setting the maximum suppliers can charge on default tariffs for the first three months of 2026.
From 1 January to 31 March 2026, the typical household using gas and electricity and paying by Direct Debit will pay £1,758 per year.
The increase adds around 28 pence per month to average bills, which is approximately 1% or £20 higher than the previous quarter.
When adjusted for inflation, the new level is 2% or £37 lower than the same period a year earlier.
For households on a standard variable tariff paying by Direct Debit, electricity will cost on average 27.69 pence per kilowatt hour (kWh), with a daily standing charge of 54.75 pence.
Gas will cost 5.93 pence per kWh, with a standing charge of 35.09 pence per day. These figures include VAT and are averages across England, Scotland and Wales.
The energy price cap, reviewed every three months, limits the maximum price per unit of energy suppliers can charge and includes costs such as wholesale energy prices, network maintenance and VAT.
Charity National Energy Action (NEA) said that despite the small rise, millions of households will continue to struggle through the winter.
NEA Chief Executive Adam Scorer said: “We enter the coldest months of the year with energy prices stubbornly high and a warm home out of reach for millions of households.
“The January price cap may only rise by 1%, but a typical bill is still £500 a year higher than winter 2021. Household energy debt continues to soar to new unwelcome records and will total over £5 billion in 2026.
“While everyone can expect £150 off their bills in April, on average, as a result of the recent Budget, there is still another winter to endure. Millions of families will have either gone deep into the red to heat their homes while their children are off school or been blue with cold over Christmas. Six million children are estimated to live in fuel poor homes. Winter cruelly exposes the cost of a cold home to young children.
“We expect the first announcements of the UK government’s £15 billion Warm Homes Plan very soon. It represents the biggest single opportunity to turn the tide on fuel poverty and cold homes.”
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