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Energy bills to edge higher for most Britons after 0.2% price cap rise
Published by Global Banking & Finance Review®
Posted on November 21, 2025
2 min readLast updated: January 20, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on November 21, 2025
2 min readLast updated: January 20, 2026
Ofgem will raise the UK energy price cap by 0.2% from January, affecting millions of households. This includes costs for the Sizewell C nuclear plant.
By Susanna Twidale
LONDON (Reuters) -Millions of British households will see energy bills edge higher next year after regulator Ofgem said it would increase its domestic price cap by 0.2% from January due to higher policy costs.
The rise, though small, will be a blow for the government which has pledged to reduce energy prices and is under pressure to next week unveil measures in the budget to help cut household bills.
The rise is partly due to the addition of a nearly 1 pound per month cost added to bills to help pay for the new Sizewell C nuclear plant which is expected to cost some 38 billion pounds ($50 billion) and comes despite a 4% fall in wholesale energy costs.
Wholesale gas and power prices are a major part of the formula Ofgem uses to calculate the price cap, but network and policy costs are becoming a larger part of the bill as the network is upgraded and more social and environmental levies are added to bills.
The new cap of 1,758 pounds ($2,300) a year for average use of electricity and gas is up around 3 pounds from the previous cap for the period from October to the end of December.
($1 = 0.7639 pounds)
(Reporting by Susanna Twidale in London, Raechel Thankam Job and Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips, Rashmi Aich and Conor Humphries)
The price cap is a limit set by the regulator, Ofgem, on the maximum amount that energy suppliers can charge customers for their energy usage.
Wholesale energy costs refer to the prices that energy suppliers pay for electricity and gas before selling it to consumers.
Ofgem is the Office of Gas and Electricity Markets, the regulator for the electricity and gas markets in Great Britain.
The Sizewell C nuclear plant is a proposed nuclear power station in Suffolk, England, expected to contribute to the UK's energy supply.
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