Energy bills to rise from 1 January but Martin Lewis warns that high electricity users will be harder hit by Price Cap change
The price most households pay for gas and electricity will rise by 0.2% on average from Thursday 1 January as energy regulator Ofgem has announced the latest Energy Price Cap rates. However, MoneySavingExpert.com founder Martin Lewis has warned that high electricity users will see bills rise by much more.
Martin Lewis: 'Electricity costs are rising, while gas falls, and yet again the hated standing charges are rising'
Commenting on today's (Friday 21 November 2025) Energy Price Cap announcement, Martin wrote on X (formerly Twitter):
The headline is Ofgem's Energy Price Cap for the three months starting 1 January is to RISE 0.2%, but that's only part of the story; electricity costs are to rise a real amount, while gas falls, and yet again the hated standing charges are rising. Here are the average UK Direct Debit rates:
Electricity unit rates: 27.69p/kWh (was 26.35p), up 5.1%.
Electricity standing charges: 54.75p/day (was 53.68p), up 2%.
Gas unit rates: 5.93p/kWh (was 6.29p), down 5.7%.
Gas standing charges: 35.09p/day (was 34.03p), up 3.1%.
So those on the Price Cap (all those on standard tariffs ie. if you've not fixed or got a special deal) with high electricity use and low or no gas use will see their bills rise by 3% or 4% come 1 January.
These changes are not caused by an increase in wholesale costs as normal – (which is why the prediction had been down 0.5%ish) as they went down over the three-month assessment period – but by a mix of policy and network costs, such as the cost for nuclear, costs for linking up networks, and the cost of the Warm Home Discount.
Electricity is seen as more universal, so when they want to add policy costs to bills, they do it there, yet that is somewhat perverse as it means we see a relative increase in electricity costs compared to gas, when the whole policy driver is to move people off gas.
The best move for most people is to get onto a comparison site, like Cheap Energy Club, and find yourself a cheap fix, especially as the April Cap is predicted to rise 4 to 5% (though I'm hearing a couple of cheaper tariffs may launch next week, so you may want to hold until then). The cheapest deals are around 10% less than the current Price Cap. Also some good 'Time of Use' and EV tariffs too.
We have to question why we lump all these policy costs on to electricity bills – Warm Home Discount, debt forgiveness, renewables (I know some question the policies themselves, but that's another matter).
It's these policy costs that are now the key driver of predicted future price rises (up 5% in April is the current prediction) and are making an ever bigger chunk of energy bills.
Putting them on electricity bills is regressive compared to putting them into general taxation – and is policy perversion for a government trying to get people to ditch gas (which due to this, is getting relatively cheaper).
We know the investment being made in the network and renewables is likely to keep adding costs until the mid-2030s, we need to start thinking about the reality of that now, and how it is paid for.
How the Price Cap works and what's changing from 1 January
The Energy Price Cap sets a limit on the maximum amount suppliers can charge households on standard or default variable tariffs (essentially everyone not currently on a fix) for each unit of gas and electricity they use, and sets a maximum daily standing charge (what you pay to have your home connected to the grid).
There's no actual cap on what you pay, so if you use more, you pay more. The Price Cap changes every three months and is now set to rise slightly. You can see the average unit rates and standing charges until Wednesday 31 December 2025 under the current Cap, and what they will be under the new Cap from Thursday 1 January 2026 below.
New Energy Price Cap rates from 1 January to 31 March 2026 | Current Energy Price Cap rates from 1 October to 31 December 2025 | |
|---|---|---|
Gas | Unit rate: 5.93p per kilowatt hour (kWh) – down 5.7% Standing charge: 35.09p per day – up 3.1% | Unit rate: 6.29p per kilowatt hour (kWh) Standing charge: 34.03p per day |
Electricity | Unit rate: 27.69p per kWh – up 5.1% Standing charge: 54.75p per day – up 2% | Unit rate: 26.35p per kWh Standing charge: 53.68p per day |
Rates and standing charges are averages, which vary by region. Assumes payment by Direct Debit and includes VAT (at 5%). For those who pay each month after getting a bill, it's 8% higher, on average. If you prepay for your energy, it's 3% cheaper, on average.
On an average annual basis, here's what the Cap will be set at from 1 January 2026:
-
If you pay by monthly Direct Debit, it'll be £1,758 a year on average for a typical dual-fuel household. This is a rise of 0.2%.
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If you prepay for your energy, prices will rise by 0.2% to £1,711 a year.
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If you pay on receipt of a bill, it'll be a 0.2% rise to £1,894 a year.
What happens after January's Price Cap?
Current analysts' Price Cap predictions are that after January's small increase, the Cap could rise again by around 5% in April 2026. This is largely due to an expected increase in network costs (what we pay towards operating and maintaining the UK's electricity and gas networks) and policy costs. Though the further out you go, the more crystal-ball gazing it is.
How to check if you're on a Price-Capped tariff
If you're not on a fix or special deal, you are likely to be on the Price Cap. These are firms' standard default consumer tariffs, often called 'Standard Variable' or 'Flexible' tariffs.
On one of these tariffs? If so, you're on the Price Cap: British Gas Standard Variable | EDF Standard (Variable) | E.on Next Next Flex | Octopus Flexible Octopus | Ovo Simpler Energy | Scottish Power Standard.
If you don't know for sure, assume you, like two thirds of homes, are probably on a Price-Capped tariff.
You can save 10% compared to the current Price Cap by fixing
The cheapest year-long standalone fixes right now are about 10% LESS than the current Cap (and about 10% less than the new January Cap), so if you get a cheap fix now you can lock in at a lower rate for a year, get price certainty and save instantly.
Your cheapest fix depends on where you live and how much you use, so do a comparison.
Remember though, the price savings comparison sites (including Cheap Energy Club) will show now are compared to the current Cap, not the one it'll rise to in January. This means savings will be very slightly higher from January (though it shouldn't make a big difference).
Options other than fixing
Those with low usage should also consider looking at EDF's special tracker deal, which discounts up to £50 off the annual standing charge (with low usage, that's a bigger proportionate saving).
Meanwhile, sophisticated users could look at (or likely already know about) Octopus' time of use tariffs.
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