Energy regulator Ofgem has today [Friday 21 November] announced a
0.2% rise of the energy price cap for the period covering January
to March 2026.
This change amounts to a small increase of around 28 pence a
month for the average dual fuel household. Year on year when
adjusted for inflation the new cap is 2% or £37 lower than the
same period in 2025.
The price cap refers to the default tariff applied when a
customer is not on a fixed-rate tariff. It sets a maximum rate
per unit and standing charge that can be billed to customers for
their energy use.
For an average household paying by Direct Debit for gas and
electricity, the overall bill will be £1,758 per year.
Tim Jarvis, Director General, Markets, at Ofgem,
said:
“While energy prices have fallen in real terms over the past two
years, we know people may not be feeling it in their
pockets.
“The price cap helps protect households from overpaying for
energy. But it's only a safety net and there are practical ways
that customers can pay less for their energy.
“Look at different tariffs and choose what's right for you or
change the way you pay to Direct Debit or smart pay-as-you-go.
Prepayment remains the cheapest way to pay, and these customers
are already saving around £47 on average.
“While wholesale energy costs are stabilising, they still make up
the largest portion of our bills which leaves us open to volatile
prices. That's why we're working with government and industry to
boost clean energy and reduce our reliance on international
sources we can't control.”
Changing payment methods from standard credit to Direct Debit can
help reduce costs. Currently 8 million customer accounts pay by
standard credit but could be making savings of around £136 with
one simple switch.
Ofgem has introduced rules to ensure anyone struggling with their
bills gets the help they need from their supplier and encourages
customers to reach out for support if needed.
That could include tailored repayment plans, which can help
households regain control and avoid falling further behind, or
routes to financial assistance and debt advice.
Contact Information
Ofgem Media Team
020 3263 9996
press@ofgem.gov.uk
Notes to editors
1. Wholesale prices – which make up the largest portion of the
bill - are currently stable and have fallen by 4% over the past
three months. However, unpredictable global events leave us open
to volatility and prices could change. Building a clean energy
system now means we can move away from markets beyond our control
to boost energy security and stability.
2. The price cap change is driven by government policy costs and
operating costs. This includes funding government's Sizewell C
nuclear project (around £1 per month) which will bring more clean
power.
3. We have also today made a decision to update our technical
input for typical consumption, which will add 75p per month to
operating costs. The benchmark is used to set the price
cap and is based on average energy usage for a typical, dual fuel
domestic customer. This will be revised to reflect current
customer usage and ensure suppliers can recover fair and accurate
energy costs.
4. Other factors include temporary costs associated with the
extension of the Warm Home Discount (WHD) scheme (around 57p per
month). We have chosen to spread these costs over a longer period
to help keep bills more stable. The WHD and forthcoming Debt
Relief Scheme are important steps to reduce the costs of bad debt
(which we all pay for) by focusing support on people struggling
to pay their bills and with historical debts from the energy
crisis.
5. For any queries relating to government's Warm Home Discount or
Nuclear Rab (Sizewell C), please contact the Department for
Energy Security and Net Zero.
6. Standing charges are set to rise by 2% for electricity and 3%
for gas. This is driven by changes in costs associated with the
Warm Home Discount Scheme, which will provide support for around
2.7million more households this winter. It adds a total of
approximately 2p per day to standing charges.
7. For more information on the Debt Relief Scheme, please see
here.
8. Overall number of domestic customer accounts on Standard
Variable Tariffs (SVT) – ‘around 34 million' of which:
- new no. of SVT Direct Debit accounts – ‘around 19
million'
- new no. of SVT Standard Credit accounts – ‘around 8
million'
- new no. of SVT PPM accounts – ‘around 6 million'
Total number of domestic customer accounts on fixed tariffs
‘around 21 million'.
