How will the January 2026 price cap affect my energy bill?

The impact on your bill depends on your current tariff, usage, and region. If you are on a standard variable or default tariff, your unit rates and standing charges will change in line with the January 2026 cap. Direct debit customers may see a different change compared with those paying on receipt of bill or prepayment. Checking the new capped rates against your actual kWh usage will show how much your monthly and annual costs are likely to increase or decrease.

Should I switch from the price cap to a fixed energy tariff in 2026?

Whether you should switch to a fixed tariff depends on current fixed-rate offers compared with the January 2026 price cap and your expectations for future price movements. If a fixed deal is cheaper than the capped rates and fits your risk appetite, locking in can provide budgeting certainty. However, if fixed deals are more expensive than the cap or carry exit fees, staying on a capped standard variable tariff may be more cost-effective in the short term. Always compare the annual cost and any exit fees before committing.

Who does the January 2026 energy price cap apply to?

The January 2026 energy price cap applies to domestic customers in Great Britain on standard variable or default tariffs, including those who have not actively chosen a fixed-rate deal. It does not usually apply to: fixed-term tariffs, some special discount tariffs, or business energy contracts. If you are unsure, check your latest bill or account to see what type of tariff you are on.

Does the energy price cap limit my total bill?

No. The price cap does not limit your total bill, it limits the maximum unit rate (pence per kWh) and standing charge that suppliers can charge. Your total bill will still depend on how much gas and electricity you use. Using more energy than a typical household will mean you pay more than the headline price cap figure, while using less means you will pay less.

How can I reduce my energy costs under the January 2026 price cap?

You can lower your costs by combining tariff optimisation with energy-efficiency improvements. First, compare available tariffs to ensure you are on a competitive deal for your usage and payment method. Then, reduce consumption by improving insulation, upgrading to efficient heating controls and appliances, and changing daily habits such as lowering thermostat settings, reducing hot water usage, and switching off standby devices. Many households can make significant savings without reducing comfort when measures are implemented correctly.

Will the energy price cap change again after January 2026?

Yes. Ofgem reviews the energy price cap regularly in line with wholesale energy markets, network costs, policy costs, and other factors. This means the cap is likely to change again after the January 2026 period, and your rates could go up or down. Keeping an eye on future cap announcements and regularly reviewing your tariff options can help you stay on a competitive deal.

What information do I need to compare tariffs against the January 2026 cap?

To compare tariffs accurately you should have: your current supplier and tariff name, whether you pay by direct debit, prepayment or on receipt of bill, your annual gas and electricity usage in kWh (from a recent bill or online account), and your postcode. Using your actual kWh figures rather than monthly spend gives the most accurate comparison with tariffs and the January 2026 price cap.

January 2026 Energy Price Cap – What It Means For Your Home Energy Bills

Q: What is the January 2026 energy price cap?

The January 2026 energy price cap is the maximum unit rate and standing charge that suppliers can charge a typical household on a standard variable tariff, as set by Ofgem. It is designed to protect customers from sudden and excessive price rises while still reflecting changes in wholesale energy costs.

Understand the latest Ofgem price cap for January 2026, how it affects what you pay for gas and electricity at home, and what you can do now to cut your bills.

Check if you could pay less under the January 2026 price cap

The January 2026 energy price cap sets the maximum unit rates and standing charges suppliers can charge most homes on standard variable tariffs. But it doesn’t mean you’re on the cheapest deal.

Use our free, no-obligation energy comparison to see if a fixed tariff could beat the new cap and give you more certainty over your bills.

At a glance: January 2026 price cap

Applies from: 1 January 2026 to 31 March 2026
Covers: Most homes on standard variable and default tariffs
Sets limits on: Unit rates (per kWh) and standing charges
Does not cap: Your total bill – that still depends on how much energy you use

Figures and examples on this page are for typical usage and are for general guidance only. Your actual costs will depend on your home, region and consumption.

What is the January 2026 energy price cap?

The energy price cap is a limit set by Ofgem – the UK energy regulator – on the maximum amount suppliers can charge most households on standard variable or default tariffs for each unit of gas and electricity, plus a daily standing charge.

The January 2026 cap is the level Ofgem has set for the three-month period from 1 January to 31 March 2026. It replaces the previous cap that ran from October to December 2025.

Although it’s often talked about as a cap on annual bills, it is not a limit on what you pay overall. The cap works by setting regional unit rates per kWh and daily standing charges. Your total bill still depends on how much energy your household uses.

Who does the price cap apply to?

The January 2026 energy price cap applies to you if:

You are on a standard variable tariff with your supplier
You haven’t chosen a fixed energy deal, or your old fixed deal has ended
You pay by Direct Debit, on receipt of bill or via prepayment (with slightly different limits for each)

If you’re on a fixed-rate tariff, the cap does not directly apply to that tariff – but it still acts as a benchmark when comparing whether to fix or stay variable.

Key points to remember

The price cap affects unit prices, not your total bill.
If you use more energy than average, you’ll pay more than the “typical” bill quoted in the media.
If you use less, you’ll pay less – even under the same cap.
You’re free to switch supplier or tariff if a better deal is available.

How the January 2026 price cap affects your home energy bill

Ofgem bases the price cap on the annual cost for a “typical” dual-fuel household using gas and electricity, paying by Direct Debit. The January 2026 cap then translates this into separate unit rates and standing charges for each region in Great Britain.

In practice, this means:

If you are already on a standard variable tariff, your unit prices will change automatically on 1 January 2026.
Your Direct Debit amount may be reviewed by your supplier, based on expected usage at the new rates.
If you were previously on a fixed deal that ended, you may have been moved to a capped standard tariff – and this new cap will now apply.

Why your bill might still go up or down

Even under the same cap, your bill can change because of:

Your usage: Colder weather, more time at home, or new appliances all increase consumption.
Payment method: Direct Debit is usually cheaper than paying on receipt of bill.
Meter type: Prepayment meters often have different – sometimes higher – rates under the cap.
Region: Unit rates and standing charges vary across the UK.

Example: typical dual-fuel household

For a medium-use dual-fuel household paying by Direct Debit, the January 2026 cap might translate into a bill of around:

• Electricity: based on your kWh usage plus a daily standing charge
• Gas: based on your kWh usage plus a daily standing charge

Exact figures depend on your region and tariffs. Use a recent bill to check your own annual kWh usage, then compare live prices using our tool.

Why does the energy price cap change every three months?

From 2023, Ofgem moved to updating the energy price cap every three months instead of twice a year. The January 2026 price cap is one of these quarterly updates.

The cap is based on several factors, including:

Wholesale gas and electricity prices
Network costs (getting energy to your home)
Operating costs for suppliers
Environmental and social policy costs
A small allowance for supplier profit

When these underlying costs increase, the cap usually rises. When they fall, the cap can drop. This is why your unit rates can change several times a year, even if you stay on the same variable tariff.

Should you fix your energy prices in 2026?

Fixing your energy tariff means you pay locked-in unit rates for a set period – typically 12, 18 or 24 months. This can protect you if prices rise in future, but you might miss out if prices fall.

Consider a fixed deal if:

You want certainty over what you’ll pay each month
You find a fixed tariff that’s at or below the current price-capped rates
You’re comfortable with any exit fees if you leave early

Our comparison service checks both price-capped variable tariffs and fixed deals from a wide range of suppliers, so you can see which works best for your home.

How to switch and save under the January 2026 price cap

Even with the protections of the energy price cap, you may still be overpaying if you’ve been on your supplier’s standard variable tariff for a long time. New customers are often offered better rates or incentives, especially on fixed deals.

Switching is usually simple

Grab a recent bill – note your current tariff, supplier and annual kWh usage for gas and electricity.
Run a comparison – enter your postcode and usage to see live deals in your region.
Choose a tariff – compare price-capped standard tariffs with fixes and green energy options.
Confirm the switch – your new supplier handles the changeover, usually within 5 working days.

There’s no interruption to your supply, and you use the same pipes, cables and meters – you’re just paying a different company for your energy.

Will the price cap stop me saving money?

No. The price cap sets a maximum that suppliers can charge for standard variable tariffs – they’re free to go lower. That’s why it’s still worth checking whether another supplier, or a different tariff with your existing supplier, can beat the cap.

Start your energy price comparison

See in minutes how the January 2026 price cap compares with the best tariffs available for your home.

Lower your bills further: cut usage, not comfort

Because the January 2026 price cap limits unit prices, one of the most effective ways to reduce your bill is to use fewer units of gas and electricity – without compromising too much on comfort.

Quick wins for most homes

Turn your thermostat down by 1°C: This can shave around 10% off your heating use over a year.
Use heating controls smartly: Set timers so you only heat the rooms you need, when you need them.
Stop draughts: Seal gaps around doors, windows and chimneys to keep warm air in.
Swap to LED lighting: LEDs use up to 80% less electricity and last much longer.
Wash at 30°C: Lower washing temperatures cut electricity use significantly.

Bigger steps for long-term savings

Loft and cavity wall insulation: Reduces heat loss and can pay back in just a few years.
Modern condensing boiler or heat pump: Uses energy more efficiently for heating and hot water.
Smart heating controls: Room thermostats, smart TRVs and zoning can help avoid wasted heat.
Solar panels: Generate your own electricity and reduce what you draw from the grid.

Combining smart switching with sensible efficiency upgrades means you’re making the most of the protection the January 2026 price cap offers – while still actively driving your costs down.

Why give meter readings regularly?

Under the price cap, accurate billing matters more than ever. If your supplier is estimating your usage:

You could be building up unexpected debt if they underestimate.
You might pay more than necessary each month if they overestimate.

Submitting regular readings – or using a smart meter – helps ensure you’re billed correctly at the new January 2026 rates.

If you already have a smart meter, check that it’s still sending readings automatically. If not, contact your supplier.

January 2026 energy price cap – frequently asked questions

No. The price cap only limits what suppliers can charge for each unit of energy (kWh) and standing charge. Your total bill depends on how many units you use. If you use more energy than the “typical” household, you’ll pay more than the headline cap figure; if you use less, you’ll pay less.

No. Fixed-rate tariffs are not directly capped. When you fix, you agree specific unit rates and standing charges for the length of your contract, even if they are above or below the price cap. However, suppliers still use the cap as a benchmark, and you can use it to judge whether a fixed deal offers good value compared with the capped standard tariff.

Yes. There is a specific price cap level for prepayment customers. It works in a similar way, setting a maximum unit price and standing charge that suppliers can charge for prepayment tariffs. Check your supplier’s rates and compare them with other prepayment options to ensure you’re not overpaying.

Yes, but only to reflect your expected annual usage at the new rates. Suppliers must base Direct Debit amounts on fair and transparent estimates. If your Direct Debit seems too high or too low after the January 2026 change, contact your supplier with actual meter readings and ask them to review it.

Government support schemes can change from year to year. Separate from the January 2026 price cap, some households may qualify for help such as the Warm Home Discount, Winter Fuel Payment or other targeted support. Check the latest information on GOV.UK or speak to your supplier if you’re struggling to pay.

The best way is to compare using your annual kWh usage. Enter your postcode and usage into our comparison tool, then filter for fixed tariffs. You’ll see projected annual costs for each deal alongside your current price-capped tariff, making it clear which is cheaper based on the January 2026 rates.

Make the January 2026 price cap work for you

The price cap is there to protect you from unfairly high standard tariffs – but it doesn’t guarantee you’re on the best possible deal. By taking a few minutes to compare tariffs and trimming unnecessary usage, you can take control of your gas and electricity costs for 2026 and beyond.

Free, fast and secure. See how the latest price cap compares with the best deals available in your area.

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Updated on 7 Dec 2025