Yes, energy bills are likely to go up in 2026, with the average household energy bill projected to rise by approximately 9% from April 2026 under the new Ofgem price cap (Ofgem, 2026). This increase is driven by higher wholesale gas costs and network charges, affecting around 28 million households in Great Britain.
- Average bill rises 9% to £1,823 from April 2026 under Ofgem cap.
- Wholesale gas costs drive 40–50% of your bill, up 15% year-on-year.
- Check your tariff type and region as increases vary by payment method.
The exact amount you pay depends on your energy usage, tariff type, and region. Bills are not rising uniformly; direct debit customers may see a smaller increase than prepayment meter users. However, the general trend is upward, with energy costs remaining volatile due to global gas markets and carbon pricing.
Ofgem price cap sets the maximum unit rate
The Ofgem price cap limits the maximum amount suppliers can charge per unit of electricity and gas, but it does not cap your total bill. From April 2026, the cap is set at £1,823 per year for a typical dual-fuel household paying by direct debit (Ofgem, 2026). This is a 9% rise from the £1,671 cap in January 2026. The cap is reviewed quarterly, so further increases are possible in July and October 2026 if wholesale prices remain high.
Wholesale gas costs drive the rise
Wholesale gas prices account for roughly 40–50% of your bill. In 2026, global gas demand has increased due to colder winters and reduced Russian pipeline supplies, pushing wholesale costs up by around 15% year-on-year (UK Government, 2026). Electricity prices are also linked to gas because gas-fired power stations generate about 40% of UK electricity. This means even if you use electric heating, your bills are affected by gas prices.
Energy efficiency savings can offset the rise
Improving your home’s insulation and heating efficiency can reduce energy use by up to 30%, partially offsetting bill increases. The Energy Saving Trust estimates that loft insulation saves around £300 per year, while cavity wall insulation saves £250 (Energy Saving Trust, 2026). Government schemes like the Great British Insulation Scheme offer grants up to £2,500 for eligible households (GOV.UK, 2026). Without these measures, your bills are likely to climb further.
A worked example
A typical 1930s semi-detached home in Manchester currently paying £1,823 under the April 2026 Ofgem price cap could see its annual bill rise to £1,987 if wholesale gas costs push the cap up further in July 2026. This scenario assumes a dual-fuel direct debit household with average consumption of 2,900 kWh electricity and 12,000 kWh gas per year. Installing an air source heat pump under the Boiler Upgrade Scheme reduces the bill to roughly £980 annually after the £7,500 grant, cutting yearly costs by over £1,000. The Energy Saving Trust estimates a well-insulated semi-detached home saves £395 to £1,005 per year with a heat pump versus a gas boiler. With the 0% VAT on installations lasting until March 2027, the upfront cost after the BUS grant sits at approximately £5,500, giving a payback period of around 5 years and lifetime savings of £25,000 over 25 years.
| Item | Figure |
|---|---|
| Upfront cost after grants | £5,500 |
| Yearly savings | £1,007 |
| Payback period | 5.5 years |
| 25-year lifetime savings | £25,175 |
What homeowners often get wrong
The most common mistake is assuming the Ofgem price cap limits your total bill, not just the unit rates and standing charges. This misconception leads homeowners to underestimate their exposure to rising usage costs. Here are three frequent errors to avoid.
- Thinking the cap guarantees your bill The cap sets the maximum price per kWh, not your total spend. If you use more energy, your bill rises even if the cap stays flat. A household using 15,000 kWh gas instead of the typical 12,000 kWh could pay an extra £180 per year.
- Ignoring standing charge increases Standing charges are included in the cap and have risen by 10% in 2026, adding £30 to £50 to annual bills regardless of usage. Many homeowners miss this fixed cost when budgeting for energy savings.
- Assuming all tariffs are the same Fixed-rate tariffs can beat the cap but often carry exit fees. Switching to a fixed deal in April 2026 could lock in a rate 5% lower than the cap, saving £90 per year. However, missing the switch window means you are stuck on the default variable tariff.
Quick reference
- The average household energy bill is projected to rise by 9% to £1,823 from April 2026 under the Ofgem price cap.
- Wholesale gas costs account for 40-50% of a typical bill and have risen by 15% year-on-year in 2026.
- Households on prepayment meters typically pay £30 to £50 more per year than direct debit customers under the same cap.
- Installing an air source heat pump with the £7,500 BUS grant can cut annual heating costs by up to £1,005 for a semi-detached home.
- Fixed-rate energy tariffs are currently 5% cheaper than the variable cap but require a 12-month commitment and may have exit fees.
Frequently Asked Questions
Yes, Ofgem projects a 9% rise in the price cap to £1,823 from April 2026 for typical direct debit households. Further increases are possible in July and October if wholesale prices stay high.
Wholesale gas costs have risen 15% year-on-year due to higher global demand and reduced Russian supplies, according to UK Government data. Gas-fired power stations generate 40% of UK electricity, linking electricity prices to gas.
The typical direct debit household will see a 9% increase, from £1,671 to £1,823 per year under the Ofgem price cap. Prepayment meter users may face a slightly larger rise.
