Why are energy prices so high right now? Should you fix? And what help is available?

UK energy bills have fallen substantially from their 2022/23 crisis peak — but remain stubbornly high by historical standards. Even after a welcome 7% drop in the April 2026 price cap, bills are still around 35% above their pre-energy-crisis levels.

Meanwhile, the conflict in the Middle East is creating fresh uncertainty, with surging wholesale gas costs leading suppliers to hike prices for fixed tariffs and withdraw some of the cheapest deals from the market. So what's driving prices, should you consider fixing your deal, and what support is out there for those who are struggling?

What is the energy price cap?

The energy price cap was introduced by Ofgem in January 2019 to protect households on expensive variable tariffs from being overcharged. It sets a maximum rate per unit of gas and electricity — and a maximum daily standing charge — that suppliers can apply to standard and default tariffs. Importantly, the cap limits what you pay for each unit of gas and electricity that you use, plus it sets a maximum daily standing charge. It's based largely on wholesale energy prices and applies only to providers' standard and default tariffs, which the vast majority of households are now on.

Ofgem reviews and updates the price cap level every three months. This means it can go up as well as down, and it does not cap your total annual bill — only the rate per unit. Use more energy than average and you'll pay more than the headline figure.

Between 1 April and 30 June 2026, the energy price cap is set at £1,641 per year for a typical dual-fuel household paying by Direct Debit. The current electricity unit rate is 24.67p per kWh, with a daily electricity standing charge of 57.21p. Gas is 5.74p per kWh, with a daily standing charge of 29.09p. As always, your actual rates will vary depending on your region and payment method.

Why are energy prices still high?

Energy bills have more than halved from their crisis peak — the cap reached a staggering £4,279 at its worst, though government intervention via the Energy Price Guarantee meant most households never paid that much. But even at today's level, prices remain well above where they were before the crisis began.

Global prices for gas, electricity, oil and other fuels started to increase from summer 2021 when economies began opening up after pandemic-related lockdowns. This underlying increase was magnified by reduced supply from some producers and increased tensions between Russia and Ukraine, with prices spiking sharply after Russia launched its full-scale invasion in February 2022.

While the worst of that crisis has eased, energy prices are being kept elevated by a combination of factors. In the UK, the wholesale price of gas continues to predominantly set the price of electricity, because energy prices are set by the last generator needed to meet demand — typically a gas plant. That leaves us exposed to global market swings.

Adding to this, non-wholesale costs — such as policy, social and network costs — are contributing to an increasing share of the bill. These costs pay for things like upgrades to the grid, energy efficiency for vulnerable households, and support for renewable energy. Network costs in particular have risen due to the current RIIO-3 price control framework, which funds investment in upgrading gas and power grids.

More recently, wholesale energy prices have increased sharply since the start of the conflict in the Middle East, with European gas prices surging at their fastest pace since the start of Russia's war in Ukraine in 2022. This geopolitical uncertainty is the main reason why forecasters are now predicting bills will rise again from July.

Why did bills fall in April 2026?

The April drop is a little different from previous reductions, as it was driven in part by a deliberate government policy decision rather than falling wholesale prices alone. The UK government recently announced that funding for two environmental and social schemes will either end or be funded through general taxes from April 2026. As a result, customers will save an average of £150.

This included scrapping the Energy Company Obligation (ECO) levy, which funded energy efficiency upgrades, and moving certain green levies off energy bills and onto general taxation. Over the last three months, global wholesale energy prices also went down by £38 a year, though network costs have increased by £66 a year because of the current price control framework.

Should you fix your energy deal?

This is more complicated than it might seem right now, and the right answer will depend on your personal risk appetite.

The immediate picture looks encouraging: on 1 April 2026, the energy price cap will fall by 6.7% from £1,758 to £1,641 for a typical household paying by Direct Debit. However, this drop may be short-lived — energy bills are predicted to rise by around 10% in July, due to the impact of the conflict in the Middle East. Cornwall Insight, an energy consultancy well-regarded for the accuracy of its price cap forecasts, expects the July cap to reach around £1,972 per year — an increase of around £331 per year, or 20%.

The conflict in the Middle East is causing many firms to pull fixed deals or make them more expensive. Whether fixing now makes sense depends on your view of events. If the turmoil ends before July, cheaper fixes are likely to return — in which case sticking on the cap could be the best outcome. But if you think the current situation will last a long time, fixing might be the better option, though you may pay a premium.

When comparing deals, make sure you're looking at the full picture — not just the headline annual cost but also the contract length, any exit fees, and whether the deal requires a smart meter. Comparison sites such as MoneySuperMarket, Uswitch, Go.Compare and MoneySavingExpert allow you to compare live tariffs based on your postcode and usage.

When can we expect energy costs to go down?

Energy prices have fallen since summer 2023, but are still well above pre-crisis levels, and there is little prospect of large cuts to bills in the near future. A lasting resolution to geopolitical tensions — in both Ukraine and the Middle East — would help ease wholesale gas prices. Closer to home, the long-term outlook does offer some grounds for cautious optimism: renewable generation is expected to take a slightly bigger share of Europe's supply mix, and analysts expect wholesale pressure to soften later in the year as global gas markets look a little less tense than they did during the height of recent disruptions.

The government's longer-term strategy centres on reducing dependence on fossil fuel markets. The government has launched the £15 billion Warm Homes Plan — described as the biggest home upgrade plan in British history — to help millions of families cut their bills. Separately, investment in nuclear power (including the Sizewell C project) is intended to provide more stable, domestically-generated electricity for the long term, though the benefits will take years to materialise.

What help is available with energy bills?

If you're struggling with energy costs, there are several sources of support worth knowing about.

Warm Home Discount

The Warm Home Discount provides £150 off electricity bills for eligible households. The scheme has been expanded so that all households where the means-tested benefit recipient — or their partner or legal appointee — is named on the energy bill are now eligible to receive the rebate. This brings the total number of eligible households to over 6 million. The government has confirmed the Warm Home Discount will remain in place until the end of the decade, giving eligible families certainty that they will continue to receive the £150 rebate every winter. In most cases the discount is applied automatically — you should not need to apply. For further details, visit the GOV.UK Warm Home Discount page.

Winter Fuel Payment

The Winter Fuel Payment is an annual, tax-free lump sum to help older people in England, Wales and Northern Ireland meet the cost of their winter fuel bills. Everyone over the State Pension age with a taxable income of £35,000 a year or below is eligible. In Scotland, this has been replaced by the Pension Age Winter Heating Payment.

Cold Weather Payments

Cold Weather Payments are made to households in England, Wales and Northern Ireland receiving Pension Credit, and to certain working-age households on means-tested benefits including Universal Credit, during periods of very cold weather — £25 for every seven-day period where average temperatures fall to 0°C or below.

Household Support Fund

The Household Support Fund allows local authorities in England to provide discretionary support to vulnerable households with the cost of essentials, which may include assistance with energy bills and energy efficiency measures. Contact your local council to find out what is available in your area.

Talk to your supplier

If you are struggling to pay your bills, contact your energy supplier directly. Suppliers are required to offer help — this may include a repayment plan, emergency credit, or other forms of support. Ofgem has also set out plans for a Debt Relief Scheme, which aims to support households on means-tested benefits who have accumulated energy debt. More information on available support can be found on the GOV.UK benefits and energy help page.