Electricity Cost Rise in January 2026 – A Homeowner’s Guide to Staying in Control
Electricity prices in the UK are expected to rise again in January 2026. If you’re already feeling the squeeze on your household budget, understanding what’s changing – and what you can do about it – is essential. Use this guide to stay informed, stay in control, and start saving on your home energy today.
What’s Happening to Electricity Prices in January 2026?
From January 2026, many UK households will see an increase in the unit rate they pay for electricity, along with potential changes to standing charges. These changes are driven by a mix of factors such as wholesale energy costs, network upgrade costs, environmental levies and the way the Ofgem price cap is reviewed.
The January review period is particularly important because winter is when we typically use the most energy for heating, lighting and appliances. Even a small change in the unit rate can have a noticeable impact on your monthly direct debit.
This page explains what the January 2026 electricity cost rise means for you as a home energy customer (not business), how the price cap works in practice, and the most effective steps you can take now to protect your household budget.
Key takeaways for January 2026
- • The Ofgem price cap is expected to adjust again in January 2026, influencing what many households pay.
- • Typical homes could see higher annual electricity costs unless they switch to a better tariff or reduce usage.
- • Smart meters, efficient appliances and simple behaviour changes can immediately cut your bills.
- • Choosing the right tariff type (fixed vs variable) is crucial in a rising price environment.
How the Ofgem Price Cap Affects Your Home Electricity Bill
The energy price cap set by Ofgem limits the maximum unit rate and standing charge that suppliers can charge customers on standard variable tariffs (also known as default tariffs). It does not cap your total bill, but it does cap the price per kWh you pay and the daily standing charge.
From January 2026, Ofgem is expected to update the cap to reflect the latest data on wholesale prices and network costs. If wholesale prices have risen compared with the previous review period, the cap is likely to increase – pushing up the typical cost of electricity for households who haven’t locked in a fixed deal.
Who is affected by the January 2026 changes?
- On a standard variable tariff? You are directly affected when the cap changes.
- On a fixed-rate tariff? Your unit rates stay the same until your fix ends, but new fixes available in 2026 may be priced higher.
- Prepayment meter user? Price cap protections still apply, but standing charges and unit rates may move differently.
- Economy 7 / multi-rate tariff? The cap also influences your day and night rates, though the split between them may vary.
If you’re unsure which tariff you’re on, check your latest bill or log into your online account. This gives you a clear view of how the January 2026 change is likely to impact you.
Typical home cost impact
The exact figures for January 2026 will be published by Ofgem closer to the time. However, based on recent trends, many households should prepare for:
- • Higher electricity unit rates (pence per kWh).
- • Standing charges that remain high or increase slightly.
- • Annual bill changes that vary based on household size and usage patterns.
Important: Even under the price cap, two homes on the same tariff can pay very different amounts. Your behaviour and appliances make a huge difference.
Ask Us How the Price Cap Affects YouWhy Are UK Electricity Costs Rising in 2026?
Electricity prices are influenced by a complex mix of global, national and local factors. Understanding these helps explain why bills are moving up again in January 2026.
1. Wholesale energy markets
Suppliers buy electricity on wholesale markets, often months in advance. If global gas prices rise or there is reduced capacity from renewables or nuclear power, wholesale electricity prices increase. These costs are passed on to households through higher unit rates.
Geopolitical tensions, extreme weather events and global demand all play a role in pushing prices up or down. January 2026 prices reflect what has been happening in these markets during 2025.
2. Network, policy and environmental costs
Your bill also covers the cost of maintaining and upgrading the UK’s electricity networks. As the country transitions to low-carbon energy, extra investment is needed to connect new renewable sources, improve resilience and manage demand.
Environmental and social levies, such as those funding green generation and support for vulnerable customers, also make up part of the unit rate and standing charge you pay.
3. Supplier and operating costs
Energy suppliers have to cover operating costs, metering, customer service, billing and regulatory compliance. When these costs rise, some of the increase is reflected in retail prices.
Competition between suppliers can help keep prices lower, which is why regularly comparing tariffs and switching where appropriate remains one of the most powerful tools available to households.
4. Winter demand and seasonal patterns
Electricity demand is higher in winter because we use more lighting, heating and home entertainment. Price cap adjustments that fall in January tend to coincide with this higher usage period, increasing the impact on winter bills.
Reducing your usage during peak times and improving your home’s efficiency can offset some or all of the rise in unit prices.
What You Can Do Before and After the January 2026 Price Rise
You can’t control the global energy markets, but you can control how much electricity your home uses and how you pay for it. The actions below are designed specifically for UK households preparing for the January 2026 electricity cost rise.
1. Review your current tariff
Start by checking whether you’re on a fixed-rate or standard variable tariff. You’ll find this information on your latest bill or in your online account.
- On a variable tariff? You will be directly exposed to the January 2026 rise.
- On a fixed tariff? Note the end date and what happens when it expires.
Knowing exactly what you pay per kWh and per day puts you in a stronger position to decide whether to switch or fix.
2. Decide between fixed and variable rates
In a rising price environment, many households prefer the certainty of a fixed tariff. A fix locks in your unit rate and standing charge for a set period (usually 12–24 months).
However, if prices fall later in 2026, a fixed deal could end up costing more than staying on a variable tariff linked to the price cap. It’s worth comparing both options based on your usage, risk appetite and budget.
3. Compare deals before the rise hits
Suppliers may adjust their tariffs before and after the January 2026 price cap update. Use this window to compare offers from multiple providers.
Look at the total annual cost, not just the unit rate. Consider:
- Standing charge levels
- Exit fees for leaving a fixed deal early
- Online-only or paperless billing discounts
4. Install or use your smart meter effectively
A smart meter doesn’t reduce prices by itself, but it gives you real-time visibility of what you’re using and when. This makes it much easier to:
- Spot wasteful habits and high-consumption appliances
- Shift some usage to cheaper off-peak times (if your tariff supports it)
- Budget more accurately for monthly bills
If your home doesn’t have a smart meter yet, contact your supplier and ask about installation times ahead of the 2026 changes.
5. Track your usage month by month
As prices rise, knowing your baseline usage becomes extremely valuable. Spend a few minutes each month noting down your meter readings or checking your smart meter app. Watch for:
- Unexplained spikes in usage
- Seasonal trends – higher winter, lower summer
- Impact of any energy-saving measures you introduce
This simple habit can quickly highlight if something is wrong, such as faulty appliances, heating left on or changes in occupancy.
15 Practical Ways to Cut Your Home Electricity Use in 2026
You don’t have to radically change your lifestyle to make meaningful savings. Small, consistent improvements across your home can easily offset much of the January 2026 price rise.
In the living room & bedrooms
- Switch to LED lighting in all rooms. LEDs use up to 80% less electricity than traditional bulbs and last far longer.
- Turn appliances off at the plug instead of leaving them on standby. TVs, games consoles and set-top boxes all draw power when idle.
- Use timers or smart plugs for lamps and equipment so they are only on when needed.
- Lower electric heating where possible and use draught excluders, thicker curtains and rugs to keep warmth in.
In the kitchen
- Only boil the water you need in the kettle and descale it regularly to keep it efficient.
- Use lids on pans and match the hob ring size to your pan to reduce cooking times.
- Fill the dishwasher and washing machine fully before running and use eco or lower temperature cycles where suitable.
- Defrost your freezer regularly and keep the temperature settings within recommended ranges.
Laundry & hot water
- Wash clothes at 30°C where possible – modern detergents work well at lower temperatures.
- Air-dry clothing on racks or lines instead of using an electric tumble dryer.
- Fit an efficient shower head to reduce hot water use if your system allows it.
- Insulate hot water cylinders and pipes to keep water hotter for longer and reduce electricity use on immersion heaters.
Home office & devices
- Use laptops instead of desktops where possible – they typically use far less electricity.
- Enable energy-saving settings on computers, monitors and printers.
- Unplug chargers once phones and tablets are fully charged.
- Consider smart thermostats and smart plugs to automate savings around your daily routine.
Planning for the Longer Term: Making Your Home More Efficient
While quick wins can soften the impact of the January 2026 price rise, thinking ahead to the next few years can deliver even greater savings and comfort. Many improvements are supported by UK-wide or regional grants and incentives.
Consider these longer-term steps:
- Upgrading insulation – improving loft, cavity wall or solid wall insulation reduces heat loss and cuts both electricity and gas bills.
- Replacing old electric heaters – modern, high-efficiency heaters, heat pumps and efficient storage heaters use less energy for the same warmth.
- Installing solar panels – rooftop solar can significantly reduce your imported grid electricity, especially if paired with a suitable tariff and, optionally, battery storage.
- Choosing efficient appliances – when replacing white goods, look for higher energy ratings and compare estimated annual kWh usage.
These changes may require upfront investment, but in a world of rising electricity prices they can pay back faster than many people expect.
Are you eligible for financial support?
Depending on your circumstances, you may be able to access support such as:
- Government schemes for insulation and heating upgrades
- Support from your local council or housing association
- Grants and loans for low-carbon technologies
Always check the latest guidance on official UK Government and local authority websites, as criteria and schemes can change over time.
Staying in Control of Your Energy Budget
Higher electricity prices don’t have to mean financial stress. With some planning and the right tariff, you can spread costs and avoid surprises.
- Set up a realistic monthly direct debit based on your actual usage, not guesswork.
- Build a small energy buffer into your monthly budget to handle seasonal peaks.
- Regularly send meter readings if you don’t have a smart meter, so your bills reflect real usage.
- Use online tools and apps to track your spend and forecast future bills as prices change.
If you’re struggling with your bills
If you’re worried about affording your electricity bill in 2026, it’s important to seek support early.
- Contact your supplier to discuss affordable repayment plans or payment holidays.
- Ask whether you qualify for priority services or hardship funds.
- Check eligibility for schemes such as the Warm Home Discount and other support programmes.
- Speak to reputable advice organisations for free, independent help with budgeting and debt.
Energy suppliers have obligations to help customers in vulnerable situations; you don’t have to manage it alone.
Frequently Asked Questions About the January 2026 Electricity Price Rise
Will my electricity bill definitely go up in January 2026?
Not necessarily. Many households on standard variable tariffs are likely to see higher rates if the price cap increases, but your total bill depends on how much electricity you use. If you reduce your usage or switch to a more competitive tariff, your overall costs could stay similar or even fall.
Should I fix my electricity price before January 2026?
A fixed tariff can provide peace of mind if you want certainty over your unit rate and standing charge. However, if wholesale prices fall after January 2026, you may end up paying more than those on variable tariffs linked to the cap. Compare the total costs and consider how much you value price stability.
How often does the energy price cap change?
Ofgem reviews the energy price cap periodically to reflect changes in wholesale prices, network costs and other factors. The January 2026 change is one of these scheduled reviews. Always check the latest Ofgem announcements for the most up-to-date timings and figures.
Does the price cap apply to every electricity tariff?
No. The cap mainly applies to standard variable and default tariffs, including most prepayment tariffs. It does not directly control the price of fixed-rate deals, although these are influenced by the same wholesale cost trends. Always check the tariff details before switching.
Is this information financial advice?
No. The information on this page is for general guidance only and reflects the situation as understood at the time of writing. It is not personal financial advice. For tailored advice, please speak to a qualified financial adviser or an accredited energy or debt advice service.
How can I stay updated on future price changes?
You can stay informed by checking Ofgem’s official website, monitoring announcements from your supplier and revisiting our news pages for updates on home energy prices, tariffs and ways to save on your bills.
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