Ofgem announced on 21 November 2025 that the energy price cap for the period 1 January to 31 March 2026 will be £1,758 a year for a typical household using electricity and gas and paying by Direct Debit1. That is a small monthly increase of 28 pence on the price of energy for such a household1. The regulator said the annual cost for people who use electricity and gas and pay by Direct Debit would be £1,758 per year, a change of 0.2%1.
Compared with the level between January and March 2025, the new cap is 1% or £20 higher, Ofgem said, but year on year when adjusted for inflation it is 2% or £37 lower than the same period in 20251. The cap level rises from £1,755 in the October to December 2025 period, an increase of £32. The price cap history shows how the level has moved since 2019.
The cap is not a limit on a household's total bill. It sets the maximum a supplier can charge for each unit of energy and the daily standing charge on a default tariff, and Ofgem reviews the level every three months1. For Direct Debit customers, the average electricity unit rate is 27.69 pence per kilowatt hour with a daily standing charge of 54.75 pence, and the average gas unit rate is 5.93 pence per kilowatt hour with a daily standing charge of 35.09 pence, based on the average across England, Scotland and Wales and including VAT at 5%1. The typical household figure is an average, and actual bills depend on how much energy a home uses, where it is and the type of meter1.
The cap level varies by payment method and meter type2:
| Payment method | October to December 2025 | January to March 2026 | Change |
|---|---|---|---|
| Direct Debit | £1,755 | £1,758 | £3 (0.2%) |
| Standard Credit | £1,890 | £1,894 | £4 (0.2%) |
| Prepayment | £1,707 | £1,711 | £4 (0.2%) |
| Economy 7 (Direct Debit) | £1,179 | £1,229 | £51 (4.3%) |
Ofgem said the wholesale cost allowance fell by £29, from £720 to £690, while the policy cost allowance rose by £21, from £215 to £236, driven by the introduction of an allowance for the Nuclear Regulated Asset Base scheme at £14 and the reprofiling of the Warm Home Discount at £72. Operating, debt and industry costs rise by £9, from £270 to £2792. The larger Economy 7 increase is due to factors including electricity wholesale price movements and the nRAB allowance, which falls on the electricity unit rate2.
"From 1 January to 31 March 2026 there will be a small monthly increase of 28 pence on the price of energy for a typical household who use electricity and gas and pay by Direct Debit."
Ofgem also set out plans to change how debt is managed in the system through a Debt Relief Scheme, which it said aims to support around 195,000 people who claim means-tested benefits when it launches in early 20261.
Why it matters for households
The cap covers default tariffs paid by standard credit, Direct Debit, prepayment meter and Economy 7 meter1. The rates by payment method show that standard credit remains the most expensive option, at £136 more than Direct Debit for a typical customer2, while the prepayment cap is £47 lower than the Direct Debit cap2.
The increase is small in cash terms, but it applies across January to March, when many homes use more energy for heating and lighting. A household's bill depends on its consumption, not on the headline figure, so a home that uses more than the typical amount will pay more than £1,758 over a year at these rates1. For a home's energy independence, the cap sets the ceiling on the unit rates and standing charges a supplier can apply to a default tariff, but it does not fix them: the level is reviewed every three months, so the rates a household pays can change each quarter1. The full guide to energy bills and the price cap sets out how the cap interacts with tariffs and payments.
What happens next
Ofgem said the levels for the period 1 April 2026 to 30 June 2026 will be published by 25 February 2026, and that it may publish earlier if external reasons require it1. The Debt Relief Scheme is due to launch in early 20261.