What is happening to gas and electricity prices?

Typical household energy costs fell 7% on 1 April, when a new price cap took effect and the way charges are calculated changed.

However, because the cost of maintaining the energy network has gone up, households will save less than initially thought.

Bills could also rise sharply when the next energy cap is introduced in July, because of the jump in oil prices since the beginning of the US-Israeli war with Iran.

The energy cap covers around 19 million households in England, Wales and Scotland and is set by the regulator Ofgem every three months.

It fixes the maximum amount customers can be charged for each unit of gas and electricity on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit.

Actual bills depend on the amount of energy used.

Between 1 April and 30 June 2026, the annual bill for dual-fuel direct debit households in Great Britain using a typical amount of energy will be £1,641.

That is a fall of £117 a year, or 7%, from the previous cap which applied between January to March. However, prices are still about a third higher than they were before the war in Ukraine.

During the three-month period, gas prices are capped at 5.74p per kilowatt hour (kWh) and electricity at 24.67p per kWh.

Ofgem regulates the energy market in England, Scotland and Wales. Northern Ireland has a separate system.

The regulator will announce the energy price cap which will apply from 1 July 2026 on 27 May.

The level of the cap will be determined by what happens to the wholesale energy market.

The US-Israel war with Iran has seen oil and gas prices jump, which could leave consumers facing significantly higher bills.

Energy consultancy Cornwall Insights, which produces energy price cap forecasts, predicted annual energy bills for a typical household could rise by £288, or 18%, from 1 July, to around £1,929 a year for a typical annual dual-fuel energy bill.

It added that energy usage is generally lowest during summer and if wholesale energy prices continue to rise, things could get very expensive from October.

Chancellor Rachel Reeves told MPs that there will be some help available for "those who need it most" if bills do rise sharply.

She did not give details of who will be eligible, what form it will take, and when it will start.

The price cap sets the unit prices for gas and electricity, but your household's actual bill depends on the overall amount you use, and how you pay for it.

The type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference.

The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit.

The vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more.

From 1 April, charges related to the insulation scheme - called the Energy Company Obligation - have been scrapped, and for three years, renewable energy projects will be 75%-funded by general taxation instead of a levy on energy bills.

Prior to the changes, energy bills in England, Scotland and Wales included additional charges to help fund insulation for low-income households, and subsidise green energy projects such as wind farms and solar panels.

Nearly everyone in England, Wales and Scotland will benefit from this cut, although the amounts will vary between households.

However, the cost of maintaining and strengthening energy network infrastructure like power lines, cables and gas pipes is rising.

In December, Ofgem said it had approved a £28bn investment to improve the electricity and gas grids in Great Britain.

It said this will strengthen the energy supply, and better shield customers from volatile energy prices. It will also reduce Britain's dependence on gas.

Customers will pay part of the cost of the upgrade, through an additional £108 added to energy bills by 2031.

These charges will also start to appear from April 2026, adding about £6 a month to the bill for a typical household covered by the energy cap.

In April, the government announced separate plans to change the way electricity is priced to ensure that household energy bills are less vulnerable to spikes in gas prices.

It also wants customers to benefit more from the cheaper running costs of renewable energy sources like wind and solar power.

The government has not said how much bills might fall but believes savings could be "significant". It said the changes could be in place by spring 2027.

About six million households have prepayment meters, according to the latest Ofgem figures.

Prepayment customers were previously charged more than those who settle their bill by direct debit, but now pay the same after the latest move to align what prepayment and Direct Debit customers pay.

Between 1 April and 30 June 2026, the typical annual bill for prepayment customers will be £1,597, down from £1,711 between January and March.

Many pre-payment meters have been in place for years, but some were installed more recently after customers struggled to pay higher bills.

Rules introduced in November 2023 mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households.

Ofgem also controls standing charges, which are a fixed daily fee to cover the costs of connecting households to gas and electricity supplies. These vary slightly by region.

Between 1 April and 30 June 2026, standing charges will typically be 57.21p a day for electricity and 29.09p a day for gas.

Campaigners have long argued that standing charges are unfair because they make up a bigger proportion of the bill of low energy users.

In response, Ofgem said it wants all energy firms to offer at least one tariff that has a low standing charge but higher cost per unit of energy.

The regulator said this would give some customers more choice and control, but acknowledged it would not be suitable for everyone.

Charities, campaigners and the suppliers' trade body criticised the proposal for just shifting the cost from one part of the bill to another rather than cutting it.

Submitting a meter reading when the cap changes means you are not charged for estimated usage at the wrong rate.

This is especially important when prices go up.

Customers with working smart meters do not need to submit a reading as their bill is calculated automatically.

Heating oil is not covered by the energy cap. About 1.5 million UK households use heating oil and they have already seen a sharp increase in bills since the Middle East conflict triggered a jump in oil prices. Some users have seen costs more than double.