British Gas, EON, EDF, OVO and Octopus customers face £1,758 charges from Thursday

Customers of every major energy firm including British Gas, E.On, EDF, OVO and Octopus Energy will face slightly higher charges from January 1.

That's because energy regulator Ofgem has announced another slight price rise taking effect on January 1 for all customers not currently on a fixed rate tariff.

It means that the average cost of electricity and gas will be £1,758 a year for a typical use household from 2026, a 0.2% or £3 increase.

The good news is that a £154 energy bills cut is just around the corner. Announced in the Budget, companies will be passing on the full reduction from the removal of green energy taxes that will save the average household about £154 per year from April.

For now, every energy customer with any firm will be forced to pay these slightly higher prices from January 1, unless you're already on a fixed tariff deal or can switch to one before New Year's Day.

Ofgem announced: "Between 1 January and 31 March 2026, the energy price cap is set at £1,758 per year for a typical household who use electricity and gas and pay by Direct Debit. This is an increase of 0.2% compared to the cap set between 1 October to 31 December 2025 (£1,755)."

Of course, the cap isn't a limit, it's just an illustration of how much it would cost an average household for a year of energy based on the unit rates and standing charges combined.

As Money Saving Expert Martin Lewis previously explained: "The price cap sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity you use, and sets a maximum daily standing charge (what you pay to have your home connected to the grid).

"That means there's no upper limit to what you actually pay - if you use more energy, you'll pay more, use less and you'll pay less.

"It only applies to providers' standard and default tariffs, so if you're on a fixed-term energy deal, the Cap doesn't apply.

"If you've not switched in the last year or so, it's likely you're on a capped tariff.

"Bear in mind that each price cap only last three months..."

From January 1, the standard variable tariff from Ofgem is 27.69p per unit of electricity, with a 54.75p per day standing charge.

Gas will be 5.93p per unit, and the gas standing charge 35.09p.