Last updated: 25 March 2026
The energy price cap in January 2026 rose by 0.2% to £1,758 per year for a typical dual-fuel household. At the time, that small rise was enough of a nudge to make switching to a fixed tariff worthwhile. Since then, the picture has moved on considerably. Ofgem has confirmed the April 2026 cap will fall to £1,641, which changes the calculation again — though the case for switching to Octopus Energy remains strong.
Update — March 2026: The April 2026 cap has been confirmed. We have published a full breakdown of what the new figure means and whether now is the right time to switch.
Read: April 2026 energy price cap — the drop, the risk, and the £50 switch offer
What the January 2026 price cap actually meant
Ofgem set the Q1 2026 energy price cap at £1,758 per year for a typical dual-fuel household paying by Direct Debit. That was a rise of 0.2% on the previous quarter — small in percentage terms, but it landed in the middle of winter when household usage is at its peak. So the actual bill impact was more noticeable than the headline figure suggested.
At the time, fixed tariffs from several suppliers were priced at or below the cap, making them genuinely competitive. Moreover, with another cap announcement expected in late February, the direction of travel was uncertain. That uncertainty is exactly why switching to a fixed tariff made sense in January.
What has changed since then
On 25 February 2026, Ofgem confirmed the Q2 2026 cap will fall to £1,641 per year from 1 April. That is a drop of £117, or 6.6%. The reduction comes from easing wholesale gas prices and a government decision to remove certain environmental levies from household bills.
Consequently, variable-tariff customers will see lower bills in April automatically. However, analysts have flagged that the Q3 2026 cap — announced by 27 May — could rise again, depending on wholesale market conditions. So the case for fixing has not gone away. It has simply shifted to a different moment.
We have a full breakdown of the April figures and what to do next in our April 2026 energy price cap guide.
Why the Octopus switch is still worth considering
Regardless of the quarter, Octopus Energy consistently offers some of the most competitive fixed and tracker tariffs in the UK market. They also run a referral scheme that adds £50 energy credit to your account once your switch completes and your first Direct Debit is taken.
That credit reduces your effective bill cost for the first month and is a straightforward bonus for doing something you might be doing anyway. The full eligibility rules and referral link are at our Octopus referral guide.
Claim £50 with the Octopus referral linkDisclaimer: Referral terms and tariff prices can change at any time. Always verify current eligibility and pricing directly with Octopus before switching. This content does not constitute financial advice.
Frequently asked questions
What was the January 2026 energy price cap?
The January 2026 price cap was set at £1,758 per year for a typical dual-fuel household paying by Direct Debit. That was a rise of 0.2% on the previous quarter. The cap applies to standard variable tariffs only — fixed tariff customers were unaffected by the January change.
Has the energy price cap changed since January 2026?
Yes. Ofgem confirmed on 25 February 2026 that the Q2 cap will drop to £1,641 from 1 April. That is a fall of £117, or 6.6%. The Q3 2026 cap will be announced by 27 May 2026. Our April 2026 cap guide has the full detail.
Is now a good time to switch energy supplier?
Possibly, yes. With the April cap confirmed and some fixed deals priced at or below that level, switching to a fixed tariff can lock in today's lower rates and protect you from any rise in July. The Octopus referral credit also adds £50 to your account, making the switch more financially attractive.
How does the Octopus £50 referral work?
Switch via an Octopus referral link and £50 credit is added to your account once your switch is complete and your first Direct Debit has been taken. The property must not already be an Octopus customer, and you must sign up directly via the referral link rather than through a comparison site. See the full terms at our referral guide.
More from CoolCuration
- April 2026 energy price cap guide — What the £1,641 cap means, whether to fix, and how to claim the Octopus £50 bonus right now.
- How to save money on winter energy bills — Practical tips for cutting household energy costs beyond just switching supplier.
- How to switch to Octopus Energy — A step-by-step walkthrough of the switch process, timelines, and what to do if anything stalls.
- What is the Octopus referral scheme? — Everything you need to know about how Octopus referrals work, who qualifies, and when the credit lands.
- Google Nest Learning Thermostat — Pair a smarter tariff with smarter heating controls to cut consumption as well as unit costs.
- Emma app — Track your household spending, see where your bills sit, and spot where you are paying too much.
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