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Hi there,
On Friday, Ofgem announced the new Jan Price Cap. Most news bulletins called it a 0.2% hike, yet that only scrapes the surface so we wanted to give you the key need-to-knows...
In reality, electricity costs will rise significantly (by 5.1%), so will the much-hated standing charges, but gas costs will fall. If you’re on a Price-Capped tariff, if possible ditch it now. The easy way is with the new 12% cheaper, cheapest fix which guarantees no price hikes till early 2027 (see below).
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New average Direct Debit Price Cap (1 Jan to 31 March 2026)
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Electricity
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Gas
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Unit rate (cost per kWh used) |
27.69p/kWh
(UP 5.1%)
Currently: 26.35p/kWh
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5.93p/kWh
(DOWN 5.7%)
Currently: 6.29p/kWh
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Daily standing charge |
54.75p/day
(UP 2%)
Currently: 53.68p/day
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35.09p/day
(UP 3.1%)
Currently: 34.03p/day
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| See the full region-by-region caps for each payment method.
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So, those on the Price Cap with high electricity and low or no gas use will see bills materially rise come 1 Jan and later. We'll explain the perverse reason this is happening below, but first let us take you through the practicals…
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A fixed tariff is where you lock in a rate for a set time (as it's the rate, not the price, use more and you still pay more) giving you the peace of mind of price certainty and currently substantial savings over the Cap too.
To show you how much it can pay to do, this is an email from Sam a month ago: "After using the
Cheap Energy Club tool
(which is very good might I add as it auto fills in the info for you) it has collectively saved my household £200/yr, my parents £500, my partners mum £400, my partners dad £300 and my partners grandparents £400!"
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New. E.on Next 14mth fix. On average 12% cheaper than current Cap. The new E.on Next 14mth fix via our Cheap Energy Club comparison is on average today's cheapest fix - though your exact results depend on location & use. It's not available on most comparison sites, but is via us and E.on Next direct, yet go via us and you get an extra MSE £20 dual-fuel cashback (£10 for elec-only switches). Here are the average unit rates...
Elec: Unit Rate: 25.13p/kWh (current cap: 26.35p | 1 Jan: 27.69p)
Standing Charge: 45.86p/day (current cap: 53.68p | 1 Jan: 54.75p)
Gas: Unit Rate: 5.20p/kWh (current cap: 6.29p | 1 Jan: 5.93p)
Standing Charge: 34.03p/day (current cap: 34.03p | 1 Jan: 35.09p)
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As we now know the Price Cap until the end of March, ie the heavy-use winter period, it's cheaper for both electricity and gas (the gas Standing Charge is similar to the Cap, but the unit rate is less). To see the exact rates where you live, when you do the comparison, within the tariff click the 'More info' link. (PS: kWh stands for kilowatt hour.)
It's available for dual-fuel or elec-only, but only for monthly Direct Debit. You don't need a smart meter, though it's no problem if you have one. It has agreed to MSE enhanced service, ie, if there's an issue, go to it first, but if it doesn't sort it, contact our Energy Club and we can and will escalate it and try to help.
There are £50 per fuel early exit penalties, but you can move to another E.on tariff without paying them, a useful benefit in the unlikely event something means worldwide energy costs dropped substantially and the whole market changed.
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How does this compare to other cheap fixes? Here are the cheapest fixes, showing the saving compared to the current Price Cap (at typical use). All will be shown via the Cheap Energy Club comparison.
The Cheapest Standalone Fixes (1)
Links go via Cheap Energy Club to give you a bespoke price
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E.on Next 14mth Fix 11.6% less (2). £50/fuel early exit penalties
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Outfox 12mth Fix 10.9% less. £150 dual-fuel early exit penalties
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EDF 14mth Fix 10.6% less (2). £50/fuel early exit penalties
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E.on Next 18mth Fix 10% less (2). £50/fuel early exit penalties
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No Early Exit Fees (so can get out if needed)
Octopus 12mth Fix 9.3% less. No early exit penalties
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For Smart Prepay customers too (none allow old-school type)
EDF 14mth Fix 7% less. £50/fuel early exit penalties
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(1) Standalone tariffs don't require you to get other products, eg, broadband or boiler cover too. (2) Includes £20 MSE cashback (£10/single fuel).
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Other specialist tariffs worth considering... Fixes are the easy peace-of-mind option, yet there are alternative models, though some are tough to display via a traditional comparison site. Here's a quick checklist...
- Low user? EDF's tracker has lower Standing Charges. It's essentially a price cap lasting 14mths, but with £50/yr lower Standing Charges, it's best ONLY for very low users (eg, under roughly £80/mth use).
- Got an electric car? Consider special electric vehicle (EV) tariffs. There are fixes which give cheaper rates for charging your car, and two-rate tariffs where you get cheap overnight rates for charging your car and can then shift other electricity use to that period (be careful with tumble dryers, they're a fire risk overnight).
- Sophisticated user? Rapid price-change tariffs can lead to big savings. special electric vehicle (EV) tariffs. Tariffs such as Octopus's Agile or Tracker see price changes either daily or hourly. For those comfortable with this, especially if you can shift usage patterns or have storage batteries, these can mean big savings.
- Got solar panels? Is an all-in-one deal cheaper? Some firms give you better solar panel rates if you get your energy supply from them too. Our guide takes you through who it's worth it for (and who it isn't).
Stop press: Autumn Budget 2025 - £150 to be cut from energy from April 2026
From April 2026, around £150 will be cut from energy bills as the Government announced in the Autumn Budget that it’ll remove various green levies paid by consumers.
Crucially, there is a clear expectation that this will be passed on to people on fixes as well as those on the Price Cap – so if you fix now, you should still see this benefit. We've full info, including Martin’s reaction, in our Autumn Budget energy announcement news story.
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Important: The Chancellor has announced in the Autumn Budget that it will remove some policy costs from energy bills next April - cutting c.£150 from a typical bill. This isn't factored in to the predictions below yet - but the cut should be passed on to people on the Price Cap AND on fixes, so it shouldn't make a big difference when you do a comparison.
The Price Cap normally moves with average wholesale costs - those energy retailers pay - over the three-month assessment period (we're already a week into that for the April 2026 Cap).
Yet policy and network cost changes impact prices, too. And that's what's driving analysts' current predictions of the April Price Cap, up 3%ish, including the cost of connecting renewable energy in remote parts of the UK, and heat pumps & EVs putting more strain on the grid.
Overall, without a significant drop in wholesale rates, it's predicted to stay higher than the current Price Cap for most of 2026. So, fixing at 12% below the current cap looks a no-brainer.
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The further in the future you go, the more it's crystal ball-gazing. A major geopolitical event can always change things, and they could get much cheaper or go the other way, but all we can do is look at what common predictions are right now.
Ultimately, if you fix and prices rise, no worries, your bill won't rise (unless you use more). In the unlikely event you fix and prices drop so substantially the fix is no longer competitive, there's always the backstop option of leaving early and paying the exit penalty.
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Thanks,
Cheap Energy Club team
You're getting this email because we think you're on a Price-Capped tariff (or a fix that ends soon so you won’t pay exit fees to switch). Not right?
Update your details in Cheap Energy Club.
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| Use Energy Club in the MSE app |
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| You can now easily check and compare energy tariffs in the MSE app. |
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