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Conflicts in Ukraine and the Middle East are contributing to global energy market volatility, making future energy costs for British households uncertain.
This guide provides up-to-date information to help you decide whether fixing energy prices for 2026 is the best option.
Wholesale energy prices fell in the first half of 2025 but have since stabilised. The latest price cap incorporates the following small changes to unit prices going into the first quarter of 2026:
Source: Ofgem – Energy price cap
Below are the current price caps for the average household and the forecasted rates for the next nine months, according to industry analysts:
Source: EDF Energy price cap predictions
Analysts expect the price cap to fall from April due to the government’s decision to end the energy company obligation scheme, which funded energy efficiency solutions.
The energy price forecasts quoted above are based on the best estimates from industry analysts.
However, it’s important to recognise the inherent uncertainty in these forecasts. Changes in the conflicts in Ukraine, Israel, Iran or even this winter’s weather, can drastically affect energy prices.
Fixing energy prices will protect you from any price rises due to unexpected geopolitical events.
Energy prices remain approximately double the historical average of the past decade and are expected to stay elevated for the foreseeable future.
Electricity and gas prices continue to reflect the impact of geopolitical events, notably the conflict in Ukraine, which has led to a scarcity of natural gas in Europe and a corresponding increase in wholesale gas prices.
In Britain, both the electricity and gas networks rely on gas imports to meet demand, meaning our energy prices also remain high.
Fixing energy prices at the right time allows you to benefit from cheaper prices offered by suppliers looking to attract new customers. It also locks in those rates, protecting you against future price volatility.
But for both homes and businesses, people are asking – is now the right time to fix energy prices?
The answer depends on whether you need energy for your home or business. Continue reading for our detailed answer to both.
Households that have not fixed their energy prices pay default rates determined by the energy price cap.
The price cap rose by 0.2% at the start of 2026 to £1,758 for the average household.
We recommend fixing your energy prices if you can find a fixed tariff cheaper than the current price cap.
Fixing your energy rates will allow you to take immediate advantage of discounts available to new customers and protect you against market volatility.
Use our energy comparison tool to explore the best deals available today.
Businesses do not benefit from a price cap, which means out-of-contract tariffs tend to be uncompetitive and needlessly expensive.
Compare the latest business electricity prices and commercial gas rates to make an informed decision.
Use our business energy comparison service to get the best prices offered by our panel of energy suppliers.
As we’ve discussed above, fixing your energy prices provides:
However, there is another key reason why most people choose fixed contracts: Energy suppliers offer their best deals as fixed contracts to attract new customers.
With a fixed deal, an energy supplier secures a new customer for at least a year, which is great for growing their business. Suppliers compete to offer the lowest fixed energy prices to attract the most new customers.
Find out how much you could save today by fixing energy prices.
Business energy suppliers want to retain their customers and typically offer a fixed rate renewal quote to customers approaching the end of their business energy contract.
We recommend not blindly accepting the renewal rates offered by your supplier but instead comparing them to those offered by alternative suppliers. Using our commercial electricity and business gas comparison services, you can assess whether your renewal quote is a fair offer.
The energy price cap limits how much domestic energy suppliers can charge for electricity and gas with a variable tariff. It acts as a maximum price limit for energy suppliers.
The current price cap is £1,758 for the average UK home until 31 March 2026.
💡Unlike domestic consumers, there is no business energy price cap, which means that variable business energy contracts can be needlessly expensive.
The energy price cap applies to domestic standard variable (default) tariffs.
The energy price cap applies to all payment arrangements:
The energy price cap applies to variable tariffs on single-rate energy meters and dual-rate economy 7 meters.
On 21 November 2025, Ofgem announced that the energy price cap for the average household on a default tariff from 1 January to 31 March 2026 will be £1,758 per year.
The typical energy unit prices during this period will be as follows:
Source: Ofgem – Energy price cap rates
Note that the exact price cap rates depend on your home’s (1) location and (2) payment method. Enter these into our finder below to find the exact price cap rates that apply to you
The price cap that applies from the start of April 2026 is expected to be announced by Ofgem in late February.
Ofgem sets the energy price cap at a rate that allows suppliers to compete effectively and encourages customers to compare energy suppliers and switch to the most competitive tariffs.
The energy price cap is calculated based on the underlying cost of supplying electricity or gas, plus an allowance for the profit of energy suppliers.
Here’s a breakdown of the separate costs incurred by energy suppliers that are included within the price cap: