Customers of British Gas, EON, EDF, OVO, and Octopus Energy are being warned that from Friday, they will face higher energy bills as Ofgem, the UK energy regulator, implements a £3 increase in the energy price cap. This change comes into effect on January 1, 2026.
The new price cap means that the average annual cost for a typical household using both gas and electricity and paying by Direct Debit will rise slightly to £1,758—a 0.2% increase from the previous cap of £1,755, which was effective from October to December 2025.
Ofgem explained, “Between January 1 and March 31, 2026, the energy price cap is set at £1,758 per year for a typical household.” This cap limits the maximum unit price that suppliers can charge for gas and electricity, as well as the standing charge, which covers the costs associated with maintaining infrastructure like pipes and meters.
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Financial expert Martin Lewis highlighted the cap’s purpose, stating, “The price cap sets a limit on the maximum amount suppliers can charge per unit of energy and on the standing daily charge. However, the cap applies only to standard and default tariffs, so customers on fixed-term deals are not affected.”
It is important for consumers to understand that the cap does not stop bills from increasing if their energy usage rises; rather, it limits the prices suppliers can charge per unit. Those on variable tariffs will see their costs adjust according to the new cap, while customers on fixed-rate tariffs will not see changes until their current contracts expire.
OVO Energy confirmed, “Most customers on variable tariffs will see their annual costs increase on January 1 in line with the new price cap, and we will notify customers directly on how this affects their bills. However, if you’re on a fixed-rate tariff, your prices remain unchanged until your tariff ends.”
This update underscores the modest but impactful rise in household energy costs as supply and regulatory conditions evolve.