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Millions of households will see energy bills hiked yet again on 1 January 2026. But you can avoid this increase and save on your energy bills – we explain how.
AT A GLANCE
No. Energy bills will remain the same for 2025 then increase by 0.2% for millions of UK households when the new energy price cap, set by Ofgem, comes into force on 1 January 2026.
But you don’t need to pay these energy prices. Ofgem says you could save around £200 a year by shopping around and fixing your tariff. Plus, by fixing your deal you’ll be protected against potential future energy bill hikes.
Find out instantly how much you can save on energy bills with our free switching service today
We’re used to hearing the argument that energy bills have to go up because wholesale prices have increased – but this isn’t the reason this time, according to energy expert Martin Lewis.
“These changes are not caused by an increase in wholesale costs as normal – (which is why the prediction had been down 0.5%ish) as they went down over the three-month assessment period – but by a mix of policy and network costs, such as the cost for nuclear, costs for linking up networks, and the cost of the Warm Home Discount,” he says.
Plus, high electricity-users will be hit even harder in January 2026 as electricity unit rates will increase steeply while gas unit rates will dip back slightly.
The timing of this announcement, as we’ve been hit by a sudden drop in temperature, will leave households on default energy rates across the UK worrying about how they’ll afford their energy bills.
So what will happen to the energy price cap further into 2026? Ofgem announces its next energy price cap around 6 weeks ahead of it coming into force. But a number of energy price cap forecasts are made much further in advance:
The further ahead the forecast, the less likely it is to be accurate.
British Gas says, ‘The energy market has been more stable recently, but surprises can happen. Global politics play a big role in energy prices. For example, if conflicts in Ukraine, or the Middle East worsen, wholesale gas prices could go up. This would eventually mean higher bills.’
Find out instantly how much you can save on energy bills with our free switching service today
Compare energy deals, see how much you can save on electricity and gas, switch provider today.
Yes. Consumers are being urged to shop around for cheaper energy deals. Ofgem says shopping around and switching to a fixed deal could lead to an annual saving on energy bills of £200.
“I want to remind people that you don’t have to pay the price cap – there are better deals out there so it’s important to shop around, and talk to your existing supplier about the best deal they can offer you,” said Tim Jarvis, director general of markets at Ofgem.
While energy expert Martin Lewis says “the cheapest deals are around 10% less than the current Price Cap.”
Some 35% of households are currently on fixed energy tariffs compared to just 15% a year ago when fewer deals were available.
There are also energy deals available that track under the energy price cap. Or that follow the energy price cap’s unit rates but have lower standing charges. So make sure you shop around and switch energy suppliers ASAP if you find a better deal.
But bear in mind that exactly what will happen to energy prices in the longer term is subject to debate and global developments.
Compare energy deals, see how much you can save on electricity and gas, switch provider today.
This table illustrates how much energy prices have increased in recent months and what’s going to happen next.
| Time period | Energy price cap amount |
| Old cap: 1 Apr – 30 Jun 2025 | Up 6.4% to £1,849 |
| Previous cap: 1 Jul – 30 Sep 2025 | Down 7% to £1,720 |
| Current cap: 1 Oct – 31 Dec 2025 | Up 2% to £1,755 |
| Future: 1 Jan – 31 Mar 2026 | Up 0.2% to £1,758 |
If you’re one of the 21 million households in the UK on a standard variable tariff, here’s how the new price cap will change how much you pay:
| CURRENT energy price cap rates from 1 Oct to 31 Dec 2025 | FUTURE price cap rates from 1 Jan to 31 Mar 2026 | |
| Gas | Unit rate: avg. 6.29 per kWh Standing charge: 34.03p per day | Unit rate: avg. 5.93 per kWh Standing charge: 35.09p per day |
| Electricity | Unit rate: avg. 26.35p per kWh Standing charge: 53.68p per day | Unit rate: avg. 27.69p per kWh Standing charge: 54.75p per day |
UK households have been facing increased energy costs since 2022, when the conflict between Russia and Ukraine broke out. While energy costs aren’t as high as the peaks we’ve seen, energy prices are still high and unaffordable for many.
Avoid rising energy prices and save money by switching to a fixed energy deal. Find out instantly how much you can save with our free switching service today
Compare energy deals, see how much you can save on electricity and gas, switch provider today.
Cornwall Insight says: “The cap still remains hundreds of pounds above pre-pandemic prices, even when adjusting for inflation. Furthermore, there is little indication that prices will reduce substantially over the next few years.”
Paula Higgins, Chief Executive of the HomeOwners Alliance, says, ‘Energy bills rising yet again is another blow for households. But you don’t need to accept these higher prices. We advise people to shop around and switch energy suppliers to ensure you’re on the best deal for you.’
Compare energy deals, see how much you can save on electricity and gas, switch provider today.
Yes, some help is available for energy bills. For example, individual energy companies have hardship funds. Also, if you’re a pensioner and weren’t eligible for the winter fuel allowance last year, you may be eligible this year.
In June 2025, Chancellor Rachel Reeves confirmed that pensioners in England and Wales with an annual income of £35,000 or below will now be eligible – around nine million people.
More than 10 million pensioners had lost the payment, worth up to £300 last year, when it was paid only to those on pension credit. Find out more in our guide on Energy grants and how to get them.
Avoid rising energy prices by shopping around and switching to a fixed energy deal. Find out instantly how much you can save with our free switching service today
Compare energy deals, see how much you can save on electricity and gas, switch provider today.
Here are the historic price changes to Ofgem’s energy price cap, which shows how energy bills have increased and decreased in recent years.
| Price cap period | Ofgem energy price cap | Price cap change vs previous period |
| October-December 2025 | £1,755 | +2% |
| July – September 2025 | £1,720 | -7% |
| April – June 2025 | £1,849 | +6.4% |
| January – March 2025 | £1,738 | +1% |
| October – December 2024 | £1,717 | +10% |
| July – September 2024 | £1,568 | -7% |
| April – June 2024 | £1,690 | -12% |
| January – March 2024 | £1,928 | +5% |
| October – December 2023 | £1,834 | -7% |
| July – September 2023 | £1,976 | -37% |
| April – June 2023 | £3,116* | -23% |
| January – March 2023 | £4,059* | 20% |
| October – December 2022 | £3,371* | 80% |
| Summer 2022 | £1,877 | 54% |
| Winter 2021/22 | £1,216 | 12% |
| Summer 2021 | £1,084 | 9% |
Source: Ofgem data. *This was replaced by the £2,500 Energy Price Guarantee
Once you’ve shopped around for the best energy deal, the other way to save on energy bills is to use less. You can do this by:
For more ideas read our Top 10 Energy Saving Tips guide
Compare energy deals, see how much you can save on electricity and gas, switch provider today.
