Millions of households will see their energy bills rise on Thursday, just as much of the UK braces for icy weather and cold-health alerts. The average household on a standard variable tariff in England, Scotland and Wales will pay around £1,758 a year under Ofgem’s new price cap on January 1 – £3 more than today, equal to roughly 28p per month. 

Ofgem, which sets the cap every three months, says the increase first announced in November is largely driven by funding for nuclear projects and support for winter bill discounts. Part of the rise reflects an average £1 per month added to bills to help finance the Government-backed Sizewell C nuclear plant in Suffolk over the course of its construction. An increase to standing charges – the amount consumers pay per day to have energy supplied to their homes – was also largely due to costs linked to the Government’s Warm Home Discount scheme. Around 2.7 million more low-income households, including 900,000 families with children, are now eligible for the £150 discount this winter.

Despite the rise, Ofgem says the cap is £37 lower than a year ago once inflation is factored in. The price cap limits what suppliers charge per unit, not what households ultimately pay. This means your total bill still depends on how much energy you use.

Consumer groups have warned that even small rises can hit families hard. Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “It really is a case of every little doesn’t help as households spend a fifth winter in the energy bills crisis. Tiny movements in the price cap still hit hard for families choosing between heating and eating.

“People continue to live in cold, damp homes, where the risks go beyond discomfort and into real danger, including exposure to carbon monoxide. Younger adults, private renters and households with children are among those most at risk as people cut back on heating, delay repairs and try to block draughts just to stay warm.

“Meanwhile, the wider energy industry has made more than £125 billion in UK profits since 2020, including firms operating in a dying North Sea. This isn’t a crisis of scarcity; it’s a crisis of priorities. Ministers must move beyond short-term price cap tweaks and get serious about ending fuel poverty by investing in energy efficiency, reforming energy pricing, introducing a fair social tariff and fully funding the Warm Homes Plan.”

Use our calculator below to find out how much your energy bill will rise on January 1, 2026.

Experts at Cornwall Insight said they expect energy bills to fall by £138, or 8%, to £1,620 a year when the cap is next updated in April, thanks to Government measures announced in the recent Budget.

Chancellor Rachel Reeves said £150 would be cut from the average household bill from April by scrapping the Energy Company Obligation (Eco) scheme introduced by the Tories in Government. Wholesale energy prices have also dropped in recent weeks, which is set to keep a lid on energy price hikes from April, according to Cornwall Insight.

Which? energy editor Emily Seymour said: “As we head into the coldest months of the year, many households will be concerned that the energy price cap will increase slightly in the new year.

“There are several deals on the market for lower than the price cap, so now is a good time to shop around if you’re looking to fix. As a rule of thumb, we’d recommend looking for deals cheaper than the current price cap, not longer than 12 months and without significant exit fees.”

Ms Seymour added: “If you’re on a variable tariff, make sure to submit a meter reading to ensure you pay the cheaper rates for any energy used before the new price cap takes effect.”