How will energy prices change?

How is the Energy Price Cap predicted to change in 2026?

Energy Price Cap changes are based on a published algorithm set out by regulator Ofgem. As it's a publicly available algorithm, firms can use it to make predictions on how the Cap will change in future. For full info on how the Cap works, see our Price Cap FAQs.

Currently, a handful of companies make regular, publicly available Price Cap predictions: energy suppliers EDF, British Gas and E.on Next.

Energy prices are predicted to fall over the next year

On 1 January, the Energy Price Cap will rise by 0.2%, meaning a household with typical usage paying by Direct Debit will pay £1,758 a year. After this, analysts are now predicting the Price Cap will fall in April, following the announcement in the Autumn Budget that households will see energy bills cut by £150 next year.

Prior to the Budget announcement, the predictions were for a 3% rise in the April Price Cap - now it's for an average 6% cut, so roughly half of the savings from the Budget will be taken up covering the rise that would've happened otherwise.

As the reduction will come from cheaper unit rates - the cost per kilowatt-hour (kWh) of energy used, higher users will save more as they use more, lower users less.

Other energy analysts have their own forecasting services, but these are updated less frequently than those in the table above. For example, Cornwall Insight and Octopus Energy have not updated their predictions since the end of August, so we have chosen not to include these in our table.

The further out the prediction is, the more crystal-ball gazing it is

Bear in mind, the further out you go, the more crystal-ball gazing (and subject to change) the predictions are. Each Price Cap is based on a three-month assessment period, which ends roughly six weeks before each new Cap takes effect.

During this period, Ofgem will look at wholesale prices (and other costs included in the Cap) to decide what the rates and standing charges should be for the next Price Cap period.

For example, the April 2026 Price Cap is based on the assessment period from 18 November 2025 to 17 February 2026. As this period has just begun, the predictions are very weak and are likely to change over the coming weeks.

After that, it becomes guesswork, as we aren't anywhere near the assessment periods for future Caps, and - as we've seen in the past - things can change rapidly.

What are current energy prices?

On typical use, a household paying by Direct Debit pays £1,755 a year under the current Price Cap. But remember, the cap doesn't limit how much you pay, it's a cap on what you pay for each unit of gas and electricity that you use, plus it sets a maximum daily standing charge (what you pay to have your home connected to the grid) – so if you use more, you pay more. 

The table below shows the average unit rates and standing charges per day (these vary by region) under the current Price Cap.

For a region-by-region breakdown of what you'll be paying from 1 January, see our Energy Price Cap rates guide or see our 'What you'll pay from January' calculator for an estimate of how much you should be paying under the Cap.

Can I switch and save?

Why have prices been so high?

The energy market has been crisis in recent years, with the price of energy rising massively toward the end of 2021, hitting a peak over the winter of late 2022 and early 2023, before falling back over the last year or so. Yet prices are still staggeringly high, with many paying nearly double compared to pre-crisis levels.

This has all been down to high wholesale energy prices. When the crisis began, in 2021, wholesale prices rose rapidly, as numerous countries lifted Covid-19 lockdowns, causing a surge in energy demand, as business and industry re-opened. The conflict between Russia and Ukraine also caused wholesale energy prices to spike, as many countries reduced or ended Russian gas imports in response, constraining supplies further. Plus the recent tensions in the Middle East has caused wholesale energy prices to rise.

While wholesale prices are significantly lower now than at the peak of the energy crisis, they still remain much higher than pre-crisis levels.

How to cut energy costs

There are a few areas to focus on...

• Have you got all the help you qualify for? Even with the Price Cap at much lower levels than during the energy crisis, prices are still be unaffordable for many. Check our Struggling to pay – energy help guide to ensure you're getting all the help you're entitled to.

• Try to cut your usage. There are lots of ways to reduce what you use. See our Energy saving tips, the Energy mythbusters guide for less clear-cut issues, and our Heat the human guide.

• Some could get free insulation or a grant to replace an old boiler. The Government expanded the eligibility criteria for free insulation in 2023, meaning you don't necessarily need to be on benefits to take advantage of the scheme. Our Great British Insulation Scheme guide has more on what's available.