January 2026 UK Price Cap: How to Cut Your Energy Bill Now

January 2026 UK Energy Price Cap: How Much More You’ll Pay & How to Cut the Rise

Ofgem has confirmed a small rise in the energy price cap for the first three months of 2026. While the change itself is only 0.2%, it comes at a time when bills are still much higher than before the energy crisis, and many households are looking for any way to limit costs.

This guide explains exactly what the January–March 2026 cap does, how much extra a typical home will pay, who is affected, and the practical steps you can take to soften the impact this winter.

TL;DR – Key Points

• From 1 January to 31 March 2026, Ofgem’s price cap for a typical dual-fuel home paying by Direct Debit rises by 0.2%.
• The “typical” annual bill moves from £1,755 to £1,758 – about £3 a year, or roughly 28p a month.
• The cap limits unit rates and standing charges, not your total bill – if you use more, you pay more.
• Fixed tariffs are not changed by this cap; it mainly affects default/standard variable tariffs.
• You can reduce the impact by checking tariffs, improving efficiency and using available UK support schemes.

What the January 2026 Energy Price Cap Actually Is

The energy price cap is often misunderstood as a limit on your total yearly bill. In reality, Ofgem’s cap sets the maximum your supplier can charge for:

• the unit rate (pence per kWh) for gas and electricity; and
• the daily standing charge you pay to stay connected.

Your bill is still based on how much energy you actually use. A high-usage household will always pay more than a low-usage household, even though they both face the same capped rates.

For the period 1 January–31 March 2026, Ofgem’s cap for a “typical” dual-fuel household paying by Direct Debit in Great Britain is set at an annualised £1,758, up from £1,755. This is based on assumed “typical” usage of around 2,700 kWh of electricity and 11,500 kWh of gas per year.

The small increase is mainly driven by rising non-wholesale costs – such as network expenses, policy schemes and levies – which have outweighed recent falls in wholesale gas prices.

Who Is Affected by the January 2026 Cap?

The price cap from January to March 2026 applies if you:

• live in Great Britain (England, Scotland or Wales); and
• are on a standard variable or “default” tariff with your supplier; and
• pay by Direct Debit, standard credit (on receipt of a bill), prepayment meter or Economy 7.

If you live in Northern Ireland, you are covered by a separate energy market and the Ofgem Great Britain cap does not apply.

If you are on a fixed tariff, your unit rates and standing charges are set by your contract until the fix ends. The January price cap does not change those prices, though it is still worth comparing your fixed rates with the new capped rates as you approach the end of a deal.

New Unit Rates and Standing Charges: January–March 2026

Ofgem publishes average capped rates for Great Britain. For a typical dual-fuel home paying by Direct Debit, the average capped rates between 1 January and 31 March 2026 are:

Electricity (Direct Debit, typical GB average)

• Unit rate: around 27.69p per kWh
• Standing charge: around 54.75p per day

Gas (Direct Debit, typical GB average)

• Unit rate: around 5.93p per kWh
• Standing charge: around 35.09p per day

These are averages for England, Scotland and Wales and include 5% VAT. Your exact rates may be slightly higher or lower depending on:

• your region;
• how you pay (Direct Debit, on receipt of bill, prepayment); and
• your meter type (single-rate, Economy 7, smart prepay, etc.).

Ofgem’s website provides detailed regional caps, but your supplier should clearly show your own unit rate and standing charge on your bill and in your online account.

How Much More Will Your Household Actually Pay?

Headlines about “£3 a year” or “28p a month” are based on a model “typical” user. The real-world impact for your home depends on how much energy you use.

1. Light-use households (flats, 1–2 people)

• Typical annual bill under the cap: roughly £950–£1,350.
• Likely impact from the January rise: around £1–£2 extra per year.

2. Average family homes

• Typical annual bill: roughly £1,700–£1,900.
• Likely impact: about £3–£5 extra per year.

3. High-use households (larger homes, electric heating)

• Typical annual bill: roughly £2,500–£3,200 or more.
• Likely impact: around £5–£10 extra per year, assuming usage stays the same.

These are only guides. If your usage rises sharply over winter – for example, because you rely heavily on electric heaters – your costs will increase by more than the headline 0.2% change.

Key point: The cap has only risen slightly, but bills for many homes remain around 40–50% higher than before the energy crisis. Your usage and your home’s efficiency matter far more than the 0.2% change itself.

Should You Switch Supplier or Tariff Before January 2026?

Because the change is small, some households will simply stay on their current standard variable tariff. Others may see new fixed offers and wonder whether it is worth locking in.

When switching or fixing can make sense

• You find a fixed tariff with unit rates below the January 2026 capped rates for your region.
• You value bill certainty for the next 12 months and are comfortable with early-exit fees if they apply.
• Your current supplier has high standing charges, and you can move to a deal with similar unit rates but lower daily charges.

When staying on the capped standard variable tariff is reasonable

• Available fixed deals have higher unit rates than the new cap in your area.
• You expect your usage to fall (for example due to better insulation, a new boiler or fewer people in the home).
• You prefer flexibility and do not want to be tied into a contract with exit fees.

Since the energy crisis, the standard variable tariff has often been more competitive than many fixed deals at different points in time. Always compare your own rates rather than assuming fixed tariffs are automatically cheaper.

Practical Ways to Cut Your Energy Costs for Winter 2025–26

You cannot control Ofgem’s decisions, but you can reduce how much of the cap you actually pay. Small, targeted steps can cut costs meaningfully across a full winter.

1. Check your current tariff and payment method

• Log in to your online account and confirm:
  • Are you on a standard variable tariff or a fixed deal?
  • Are you paying by Direct Debit or on receipt of bill?
• If you are on standard credit, ask your supplier how much you would save by switching to Direct Debit, as the cap allows higher rates for standard credit compared with Direct Debit.

2. Compare tariffs when the new cap takes effect

• Use reputable UK comparison tools or check suppliers’ websites directly.
• Enter your actual annual usage from your last 12-month statement rather than guessing.
• Be cautious of estimates based on “typical use” if your household is very different from average.

3. Optimise your boiler and heating controls

• For modern condensing gas boilers, consider lowering the flow temperature to around 55–60°C if safe for your system.
• Use thermostatic radiator valves (TRVs) to avoid overheating spare rooms or rarely used spaces.
• Set heating schedules to match when your home is occupied instead of running the system constantly.

4. Deal with drafts and basic insulation

• Fit draft excluders to doors and letterboxes and seal obvious gaps around windows and floorboards.
• Check your loft insulation depth; topping up to recommended levels can significantly cut heat loss.
• Insulate hot water pipes and your cylinder (if you have one) to keep water warmer for longer.

Low-cost measures such as these can easily save tens of pounds a year, which helps when standing charges remain high.

5. Make your smart meter work for you

• Keep your in-home display where you can see it and watch for spikes when large appliances run.
• Identify which devices cost the most (for example tumble dryers, electric heaters, immersion heaters) and reduce use where possible.
• Ask your supplier whether it runs any off-peak or “demand flexibility” schemes that reward shifting use away from peak times.

6. Focus on standing charges if your usage is low

For low-usage households, the standing charge can make up a large share of the total bill. Where possible:

• Compare tariffs with lower daily charges, even if the unit rate is slightly higher.
• Avoid unnecessary extra meters or supplies (for example unused outbuildings) that add additional daily charges.

Help if You Are Struggling With Energy Bills

If you are already in arrears or expect to struggle over winter, it is important to seek help early. Several UK schemes and funds may be able to support you.

Warm Home Discount

The Warm Home Discount provides a one-off £150 credit on electricity bills for eligible low-income and vulnerable households. Eligibility rules differ between England, Scotland and Wales, and in many cases the discount is applied automatically if you receive certain means-tested benefits.

Supplier hardship funds and grants

• Large suppliers such as British Gas, EDF and E.ON Next operate hardship funds to help clear or reduce arrears.
• You will usually need to share details of your income, outgoings and any vulnerabilities (for example disability or caring responsibilities).
• Check your supplier’s website or call and ask specifically about hardship funds or grants.

Local council support

Many local authorities in England, Scotland and Wales administer schemes such as:

• Household Support Fund-style payments or equivalents;
• emergency fuel vouchers for prepayment meters; and
• referrals to local welfare assistance or charitable support.

Check your council’s website under “welfare assistance”, “Household Support Fund” or “help with energy costs”.

If you receive UK benefits

If you are on Universal Credit, Pension Credit or other income-related benefits, you may be able to access:

• additional help from discretionary local schemes targeted at low-income households; and
• support from your landlord or housing association if energy costs are affecting your ability to pay rent.

If deductions are being taken from your benefits to cover energy arrears (for example through Fuel Direct), it may be possible to ask for a review or reduction if the level of deduction is causing hardship.

How to Work Out What the January 2026 Cap Means for You

To translate the price cap into a realistic figure for your household:

1. Find your annual usage for gas and electricity from your last full year’s bill or your online account.
2. Check your new unit rates and standing charges for January 2026 in communications from your supplier or online.
3. Multiply your annual usage by the new unit rates and add 365 days of standing charges to estimate your yearly cost under the cap.
4. Compare this total with any fixed deals you are offered, factoring in any exit fees and the value of flexibility.

If you are not comfortable doing the calculations yourself, reputable UK comparison sites and consumer advice organisations offer price cap calculators where you can input your usage for personalised estimates.

Bottom Line: Treat the Cap as a Safety Net, Not a Target

The January 2026 Ofgem price cap rise is small on paper – around £3 a year for a typical dual-fuel home – but it sits on top of already elevated energy prices and high standing charges. The cap limits the worst excesses of the market, yet it does not guarantee affordable bills for every household.

For most homes, the biggest savings will still come from:

• monitoring and managing usage, especially high-draw electric appliances and heating;
• improving efficiency and insulation wherever possible; and
• making full use of available UK support schemes and supplier funds if you are struggling.

Think of the price cap as a safety net rather than a target. The less energy you need to use to stay safe and comfortable, the less exposed you are to whatever Ofgem announces next.