Energy price cap rising to £1,758 from January 2026 – here’s how to save

Energy price cap rising to £1,758 from January 2026 – here’s how to save

Energy bills will rise by 0.2% for millions of households in January, according to the latest announcement by the energy regulator Ofgem.

From 1 January to 31 March 2026, households using a typical amount of energy and pay using Direct Debit could pay up to £1,758 per year. A £3 increase from the October price cap of £1,755.

Compared to the level between January and March 2025, it’s 1% or £20 higher.

Experts initially forecast a price cap drop in January due to wholesale energy becoming cheaper.

Analysts at Cornwall Insights predicted that the cap would fall to £1,733 in the New Year.

Ofgem says the price cap increase is partly due funding government projects to provide households with clean energy.

It’s important to note that the energy price cap sets the maximum amount that suppliers can charge households for each unit of gas and electricity they use.

That means the price cap doesn’t limit the size of your actual bill. What you’re charged is determined by the amount of energy you use.

Ofgem sets the cap every three months and it applies to millions of households in England, Scotland and Wales.

Will energy bills keep rising?

Chancellor Rachel Reeves announced that energy bills for all households would fall by an average of £150 from April next year in the Autumn Budget announcement last week.

The saving is due to the government ending its Energy Company Obligation (ECO) at the end of March 2026.

However, analysts have predicted that the energy price cap will rise again in April next year. So these savings may be offset by the increase.

How can you save on energy bills now?

1. Check your tariff: if you’re on a standard variable tariff or your fixed-rate tariff is due to end before January 1, switching onto a fixed-rate tariff can help you cut the cost of your energy.

2. Pay by Direct Debit: Paying by Direct Debit is usually cheaper because you don’t have to pay admin costs. Currently, 8 million customers pay by standard credit but could save around £136 per year by switching to a Direct Debit payment.

3. Shop around: price comparison can help you compare lots of energy deals quickly and find the best value. Remember to watch out for exit fees which could make your tariff more expensive if you want to switch again before the deal ends.

4. Get energy efficient: with winter on the way it’s more important than ever to conserve your energy. Taking steps to insulate your home can help you save on heating costs. While cutting back on energy waste by switching off lights, appliances and technology when they’re not in use can help you save too.

5. Apply for support: check if you’re eligible for support from the government such as the Warm Home Discount or your energy supplier, to help you afford the cost of heating and powering your home.

6. Create a budget: making a budget can help you identify other areas in your life to try and make a saving. A budgeting app can help you automate the process and get started on cutting costs.

What happens if I can’t pay my energy bills?

If you’re worried that you won’t be able to pay your energy bills, it’s important to act quickly to get help.

Contact your energy supplier as soon as possible to arrange a payment plan which you can reasonably afford. Customers on a prepayment meter can request emergency credit if they’re unable to top up.

If you’re already struggling with your bills and have fallen into debt, contacting organisations such as StepChange or Citizens Advice can help you access free advice.