Energy price cap: January 2026 cap to increase to £1,758

Ofgem, the energy regulator, has announced that the price cap for the period from 1 January to 31 March 2026 will be set at £1,758 per year for the average household paying by Direct Debit.

This is a 0.2% increase from the current price cap of £1,755. Ofgem has said this is because of government policy costs and operating costs.

What does this price cap increase mean for energy customers?

The cap had been widely expected to fall this time, so the increase comes as a surprise. It's a small rise, but it still covers January, February and March when temperatures will be cold, so energy usage overall will be higher for many households and bills are therefore likely to increase by more than this small price cap rise would suggest.

As always, the price cap figure is only an illustrative one - the actual amount customers will pay depends on their energy consumption. 

Uswitch price cap reaction

Richard Neudegg, Director of Regulation at Uswitch, said: “Millions of homes will now have their heating on to cope with this week’s cold snap, so the stubbornly high energy price cap is a stark reminder of the need for households to take matters into their own hands. 

“Industry forecasts had been predicting a small fall in the cap, so this increase will be a tedious disappointment for the millions of standard tariff customers who are already paying over the odds for their energy.

“Customers on a price-capped tariff can switch to a fixed deal now and start seeing average savings of £185 a year. In doing so, they’ll also protect themselves from the predicted increase we might see in April.

“Consumers should run a comparison for their usage levels and region. For households able to switch, fixing now at a cheaper rate is the best defence against high winter bills.

“Two million households are planning to go without central heating this winter, which is a damning indictment of the state of energy affordability. All eyes are now on next week’s Budget and whether the Chancellor can deliver any more meaningful support on energy bills.

“Importantly, a mooted removal of VAT on energy bills would apply to all customers - so those choosing a fixed deal to beat the price cap would save twice.”

What should energy customers do?

Customers who aren’t on a fixed tariff already should look at fixing their energy deal. There are deals on the market that are priced much less than the current and future price caps (and some come with perks like free electricity and cashback), so run an energy comparison to see what’s available.