Energy bills will experience a slight increase starting today due to the implementation of the new Ofgem price cap. For households paying through direct debit, the annual energy bill is set to rise from £1,755 to £1,758 under this price cap, which governs the charges for gas and electricity unit rates as well as standing charges.

The price cap does not impose a total limit on energy expenses, as the bill still hinges on individual energy consumption for those not on a fixed tariff. In parallel, the price cap for pre-payment meter users will escalate from £1,707 to £1,711 annually, while those paying upon bill receipt will see an increase from £1,890 to £1,894.

Scheduled to be updated every three months, the price cap is anticipated to change again in April 2026. Despite being 2% or £37 lower than the previous period, households are paying considerably more for energy. Consumers are encouraged by Which? to explore fixed tariff options as a means to save money.

The recent price cap adjustment was influenced by government policy expenses and operational costs, encompassing support for projects like the Sizewell C nuclear initiative and the Warm Home Discount scheme. Chancellor Rachel Reeves announced in the November Budget that households can expect an average annual reduction of £150 in energy bills from April 2026, achieved by eliminating certain green levies.

As the Energy Company Obligation concludes in March 2026 and contributions towards the Renewables Obligation scheme decrease, most energy providers have affirmed extending the savings to fixed tariff users. Predictions by Cornwall Insight suggest a potential drop in the price cap to £1,620 in April 2026, equating to a £138 reduction.