Ofgem said that the number of new fixed tariffs on the market fell in March 20261. The regulator's assessment came as wholesale gas prices doubled in early March 2026 in response to the start of the Middle East conflict1. Suppliers responded by withdrawing some fixed tariffs and increasing the prices of others1.
The wholesale movement was sharp and short-lived at first. Prices fell back from those levels in early summer before increasing to even higher levels in late summer 2026, and spot gas prices on the wholesale market in late August 2026 were at their highest level since January 20231. The earlier fall in the price cap in April 2026 was largely due to reductions in policy costs rather than wholesale prices1.
For households comparing deals, the practical effect is a thinner market. Fixed-rate offers are the main alternative to the standard variable tariff, and a smaller number of new fixed tariffs means fewer published rates to compare at any one time. The briefing notes there is little immediate prospect of savings from fixed tariffs or substantial further cuts in the price cap1.
The current direct debit price cap, covering July to September 2026, gives an average annual bill of £1,663 for typical gas and electricity consumption1. That is below the peak of £2,106 under the Energy Price Guarantee from October 2022 to June 2023, but 18% higher than the recent low in July to September 20241. Under the current cap the average price of gas is 7.3 pence per kilowatt hour and electricity 26.1 pence per kilowatt hour, with average standing charges of 29.0 pence per day for gas and 57.2 pence per day for electricity1.
| Price cap period | Average annual bill, typical dual fuel direct debit consumption |
|---|---|
| July to September 2024 (recent low) | £1,410 |
| July to September 2026 (current) | £1,663 |
| October to December 2026 | Around £1,720 |
| January to March 2027 (forecast) | 9% increase forecast |
Source: Commons Library research briefing, 28 August 20261. Typical consumption is assumed to be 2,500 kWh for electricity and 9,500 kWh for gas1. Annual bills are not capped; households that use more energy pay more and those that use less pay less1.
"Ofgem said that the number of new fixed tariffs on the market fell in March 2026."
Why it matters for households
A fixed tariff sets the unit rate and standing charge for a defined period, so the household carries the risk of wholesale movements in the other direction: if prices fall, a fixed customer does not benefit until the term ends. The terms, lengths and what is actually fixed vary between products, which is set out in the guide to fixed-rate energy tariffs. With fewer new fixed tariffs launched in March 2026, the choice between fixing and remaining on a capped standard variable tariff is narrower than usual, and the comparison between the two is covered in fixed tariff versus staying on the price cap.
Energy independence at household level rests on two things: the price a home pays per unit, and how many units it needs. The briefing states that with little immediate prospect of savings from fixed tariffs or substantial further cuts in the price cap, the only way to substantially reduce energy bills while still adequately heating and powering homes is to improve the energy efficiency of properties1. That shifts the emphasis from tariff selection towards the fabric and equipment of the home, which is the subject of tariffs and household energy independence.
What happens next
The price cap will increase by 4% in the fourth quarter of 2026 and is currently forecast to increase by a further 9% in the first quarter of 20271. Under the October 2026 cap the average price of gas rises by 9% to 8.0 pence per kilowatt hour and electricity by 1% to 26.3 pence per kilowatt hour; the gas standing charge rises by 0.7 pence per day and the electricity standing charge falls by 2.4 pence per day1. The electricity values include the effect of the government's decision to remove VAT from electricity bills for six months from October 20261. The briefing states that price cap forecasts are uncertain, so there is no guarantee that prices fall at that time1.
The briefing does not report how many fixed tariffs were withdrawn, which suppliers withdrew them, or the size of the increases applied to the remaining deals1.
Sources1 cited
- Author: BOLTON, Paul, researchbriefings.files.parliament.uk