Ofgem Confirms Energy Price Cap Rise for January 2026

Energy regulator Ofgem has confirmed a rise in the energy price cap for millions of UK households, with the latest change coming into effect from 1 January 2026. The move means that typical gas and electricity bills on standard variable tariffs will edge slightly higher over the first quarter of the year.

What’s Changing?

Ofgem’s quarterly review has set the price cap for the period 1st January to 31st March 2026 at £1,758 per year for a typical dual-fuel household paying by Direct Debit. This represents a 0.2% increase on the previous cap of £1,755.

Although small in percentage terms, the change means households on default or variable energy tariffs are likely to see a modest rise in their bills from January, often just a few extra pounds per year on average.

What Drives the Change?

The price cap limits the maximum unit rates and standing charges suppliers can charge customers on variable or default tariffs. Ofgem adjusts the cap every three months based on the underlying cost of supplying energy.

This includes:

• Wholesale energy costs (what suppliers pay for gas and electricity)

• Network and delivery charges

• Policy and environmental scheme costs

• Supplier operating expenses and VAT

While wholesale prices have remained relatively stable, increased non-wholesale costs, such as grid maintenance and policy obligations, have contributed to the small upward movement in the January cap.

How This Affects Your Bill

For those on a standard variable or tracker tariff, unit rates and standing charges will automatically update in line with the new cap.

From January:

• Electricity unit rate: 27.69p per kWh

• Gas unit rate: 5.93p per kWh

• Standing charges: slightly higher for both fuels

The figure of £1,758 is based on a typical household using average consumption. Actual costs will vary depending on your energy use, location, and payment method. The cap only applies to default or variable tariff, not fixed-rate deals.

What’s Next?

Ofgem’s next review, covering April to June 2026, is expected in late February. Analysts suggest there could be a small fall in the cap later in the year if wholesale costs continue to stabilise.

Should You Switch?

While the rise is modest, experts advise that consumers compare fixed-rate tariffs to lock in predictable prices for the year ahead. However, anyone considering switching should check exit fees and overall savings before committing.

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