What the January 2026 Energy Price Cap Means for You

Posted on Dec 18, 2025

As the new year begins, UK households are facing another change to their energy bills. From Thursday 1st January, average household energy costs will increase by 0.2%, following Ofgem’s latest update to the Energy Price Cap.

While the rise may seem small, it comes at a time when many families are already carefully watching their monthly outgoings. With electricity prices climbing, gas costs shifting, and standing charges creeping up, understanding what this change really means for your household has never been more important.

So what is the Energy Price Cap and how will it affect what you pay in 2026?

What is The Energy Price Cap?

The Energy Price Cap sets a limit on the maximum amount suppliers can charge households on standards or default tariffs for each unit of gas and electricity they use. There is no cap on what you pay, so if you use more, you pay more. How the Price Cap works

How does The Price Cap work?

Electricity costs are rising, while gas is falling. Standing charges are also on the rise. Money Saving Expert has worked out how our energy bills will look in the new year.

• If you pay by monthly Direct Debit, it’ll be £1,758 a year on average for a typical dual-fuel household. This is a rise of 0.2%.
• If you prepay for your energy, prices will rise by 0.2% to £1,711 a year.
• If you pay on receipt of a bill, it’ll be a 0.2% rise to £1,894 a year.”

Looking for Ways to Save on Your Energy Bills?

1. You could save 10% compared to the current price cap! The cheapest year-long standalone fixes are about 10% less than the current cap, and about 10% less than the new January cap too.
2. Move furniture away from radiators – Bigger items of furniture can stop the heat reaching the rest of the room. Move your sofa an inch or two away from the radiator to improve air flow. You’ll notice the room warms up much quicker!
3. Turn down your thermostat by 1 degree – Did you know turning your thermostat down by just 1 degree can cut your energy bills by 10%! You might not think such a small change in temperature would make much of a difference but for a 3-bed house this adds up to £145 saved on your heating bill every year!
4. Wash your clothes at a lower temperature – Modern washing machines work well at temperatures as low as 20 degrees, so we no longer need to make a habit of washing them at 40 degrees. The lower the temperature, the more money you’ll save!
5. Defrost your freezer – Freezers works 24 hours a day, so regularly defrosting them keeps the ice under control and keeps your appliance working efficiently.
6. Keep the oven door closed – Making the most of the oven’s window rather than opening the door means less heat escapes. Your oven then doesn’t need to work harder to maintain your set temperature. Getting into the habit of using the oven window will save you money over time.