The energy price cap, explained

What it limits, and what it doesn’t

• It caps what you pay for each unit of energy and the standing charge, not your total bill, which rises the more energy you use.[Ofgem]Source: Ofgem
• It protects people on standard variable (default) tariffs.[Ofgem]Source: Ofgem That’s whether you pay by Direct Debit, on receipt of a bill, by prepayment, or have an Economy 7 meter.[Ofgem]Source: Ofgem
• It doesn’t cover fixed tariffs, business contracts, heat networks or heating oil.[Ofgem]Source: Ofgem
• It covers England, Scotland and Wales, not Northern Ireland, where the Utility Regulator oversees prices.[GOV.UK]Source: GOV.UK
• Ofgem sets it every 3 months.[Ofgem]Source: Ofgem

The rates, 1 October to 31 December 2026

Great Britain averages. Electricity has no VAT from 1 October 2026 to 31 March 2027; gas includes 5% VAT.[Ofgem]Source: Ofgem

Prepayment has the lowest capped rates.[Ofgem]Source: Ofgem Prepayment and Direct Debit customers pay the same standing charge.[Ofgem]Source: Ofgem

On Economy 7 and other multi-rate meters, the peak and off-peak rates together can’t be more than the cap.[Ofgem]Source: Ofgem The average multi-rate unit rate on Direct Debit is 24.90p per kWh, with a 54.62p daily standing charge[Ofgem]Source: Ofgem.

Where you live changes the rates

Ofgem publishes rates for 14 regions of England, Scotland and Wales.[Ofgem]Source: Ofgem For Direct Debit electricity, the lowest standing charge is in London, at 42.92p a day[Ofgem]Source: Ofgem, and the highest is in Merseyside and Northern Wales, at 67.66p a day[Ofgem]Source: Ofgem.

What a typical bill looks like

Ofgem’s typical household uses 2,500 kWh of electricity and 9,500 kWh of gas a year[Ofgem]Source: Ofgem. On that use, a year at this cap costs:

• Direct Debit: £1,723, up from £1,663[Ofgem]Source: Ofgem
• Pay on receipt of a bill: £1,861, up from £1,796[Ofgem]Source: Ofgem
• Prepayment: £1,678, up from £1,620[Ofgem]Source: Ofgem
• Economy 7 on Direct Debit: £1,046, up from £1,039[Ofgem]Source: Ofgem

Most of this rise is gas: gas bills rise by 8%, while households that don’t use gas see an increase of less than 1%.[Ofgem]Source: Ofgem

Comparing with older figures? Ofgem lowered its typical use figures in July 2026[Ofgem]Source: Ofgem, because households now use around 7% less electricity and 17% less gas[Ofgem]Source: Ofgem. Typical bills from before then aren’t like for like, and nor are electricity rates from before October 2026, which included VAT[Ofgem]Source: Ofgem.

The VAT cut

VAT came off household electricity on 1 October 2026, saving an average of £45 a year, with nothing to do: it applies to fixed tariffs and prepayment too.[GOV.UK]Source: GOV.UK Homes that use more electricity than gas, or only electricity, save more.[Ofgem]Source: Ofgem

When it changes next

• January to March 2027: announced by 25 November 2026.[Ofgem]Source: Ofgem
• April to June 2027: by 23 February 2027. July to September 2027: by 26 May 2027.[Ofgem]Source: Ofgem

We re-check this page each time. Thinking of fixing instead? Fix, or stay on the cap?

Standing charges

The standing charge is a daily charge you pay even on days you use no energy.[Ofgem]Source: Ofgem Ofgem consulted on making every supplier offer a lower standing charge tariff, but didn’t bring the rule in.[Ofgem]Source: Ofgem Instead, a one-year pilot started in June 2026, first offered to eligible customers of EDF, E.ON, Octopus and British Gas[Ofgem]Source: Ofgem. A dual fuel household on a pilot tariff could pay about £150 a year less in standing charges[Ofgem]Source: Ofgem, but the unit rates are higher, so whether it’s cheaper overall depends on how much energy you use[Ofgem]Source: Ofgem.