Beginning in January 2026, nearly every household in England, Wales, and Scotland will start paying a little more for the energy they use. The impact of the energy price cap increasing by 0.2% for households on variable tariffs. This cap sets the maximum price consumers pay for gas and electricity. As a result, the average household using a standard level of energy will pay around £3 more per year. This especially benefits people who use 11,500 kWh of gas energy equivalent and 2,700 kWh of electric energy equivalent.
The announcement is indeed welcome news, but it comes at a time when it’s getting much colder, increasing pressure on household budgets. For most of us, that means the annual switching on of the central heating. They begin to use electrical appliances much more during the coldest months of the year. The price cap only applies to homes with one bill for gas and electricity. Payments are quick and easy, via direct debit. It will rise to £1,758 in January 2026.
In Northern Ireland, the energy sector is governed by a separate regulatory regime. As a consequence, the price cap is not in effect in that area. Nevertheless, the impact of rising costs is felt across the UK as households prepare for another winter of high energy bills.
Increased standing charges are the main factor behind the increase in the price cap. These standing charges account for the fixed costs of keeping the gas and electricity networks open and government levies. Electricity bills will increase by 2%. Gas costs are going up 3%, both of which add to the upward trend in energy costs.
Simon Francis, a representative of the public interest energy group the Energy Hub, expressed his dismay. He is particularly concerned about the cumulative effect of these increasing costs on consumers.
“This is a case of every little hurts… we need to see much lower bills but also measures to keep people’s homes warmer every winter.” – Simon Francis
That’s the case in Maine, where fossil gas unit rates have already started to drop as electricity unit rates climb ever higher. It’s those who depend on electricity most who will be hardest hit by the planned price cap rise. James Jones, one such pensioner, expressed his anger at the constant squeeze on incomes.
“We get a rise on our pension but it gets taken off you by food, petrol and everything else going up all the time so really you don’t benefit,” – James Jones
As the winter season sets in, struggling families in defined regions of England, Wales, and Northern Ireland can look forward to help. They’ll be able to access cold weather payments of £25 per week. These payments kick in when the local community’s average temperature, based on its recorded or projected, is 0°C or less. This needs to be done on seven separate days.
Campaigners say this increase is the most damaging as it comes at the coldest time of year. That action disproportionately impacts families who are already struggling with record high energy costs. The storm clouds are far from dispersed, though, as households are forced to contend with increased expenses and the arrival of colder weather.
Smart energy expert Emily Seymour encouraged consumers to shop around for the best options during this period of increasing prices.
“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,” – Emily Seymour
