In January 2026, energy bills will increase by 02%

The Sizewell C nuclear project in Suffolk is becoming more expensive to finance

The average dual-fuel household bill in the first quarter of 2026 will be 1,758 per year due to the Ofgem energy price cap increase of 0.2 percent.

It follows the regulator's announcement that the annual cap on energy prices would increase by 2% to 1,755 between October and December.

The average household using direct debit to pay for gas and electricity will pay an additional 28p per month, or 3.36 annually, between January and March as a result of the January increase.

The price cap only limits the amount that suppliers can charge consumers for a single unit of gas and electricity, so how much more you'll pay will depend on how much you use.

According to Ofgem, the new January cap was lower than the same three months in 2025 by 2 percent, or 37 annually.

Ofgem's director general of marketing, Tim Jarvis, stated: "We know people may not be feeling it in their pockets, even though energy prices have actually decreased over the past two years. The "

Wholesale energy prices have decreased by 4% over the last three months, according to Ofgem, making them "stable."

However, the regulator claimed that government policy and operating expenses, such as financing the Sizewell C nuclear project in Suffolk, were the reasons behind the price cap's increase in January.

What is the ceiling on energy prices?

Ofgem implemented the price cap in January 2019 to prevent energy suppliers from overcharging consumers on default tariffs.

Generally speaking, default tariffs are the most costly options for households.

The price cap limits the amount that energy companies can charge consumers for both their standing charge and each unit of gas and electricity. It is now changed every three months instead of every six months.

You may pay more or less than others based on your usage because the price cap places a limit on the amount that consumers are charged per unit of gas and electricity.

In addition to how you pay for your energy, where you live has an impact on how much you pay because regional rates can vary.

If you are on a default tariff (not a fixed tariff) and make payments via direct debit, standard credit, prepayment meter, or Economy 7 meter, you are subject to the price cap.

Since Northern Ireland has its own regulator, the Utility Regulator, the Ofgem price cap only applies to households in England, Wales, and Scotland.

How to cut your energy costs.

About 34 million consumers, according to Ofgem, are on default, or standard variable, tariffs. But compared to fixed tariffs, where you pay the same rate for a predetermined amount of time, these are typically more costly.

If you want certainty about the rate you'll pay, fixed tariffs can save you money. However, if wholesale energy prices decline and contribute to the price cap, you may wind up paying more than those on default tariffs. If you depart before the term expires, fixed tariffs also have exit fees.

You can use comparison websites like Go to find the best offers if you wish to sign up for a fixed tariff. MoneySavingExpert . com and MoneySuperMarket are comparable.

Go pro Gareth Kloet. According to Compare Energy, "it's important to think about your own energy use because not every deal will work out cheaper for everyone." A "

According to Ofgem, the eight million consumers who currently pay for their energy with standard credit could save £136 annually by converting to Direct Debit. See our explanation of 14 additional strategies to reduce your energy costs here.