What is the Ofgem energy price cap?

MWE1273.per_fin.main_2152865293 — **A new Ofgem energy price cap is announced every three months**

(Image credit: Getty Images)

The energy price cap sets a limit on what suppliers can charge per unit of energy and affects millions of households in the UK.

The cap is set by energy regulator Ofgem and is reviewed every three months.

The current cap is in place from 1 January to 31 March and sees the typical household on a dual-fuel tariff paying £1,758 a year.

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Ofgem has also now confirmed the price cap for the period between 1 April and 30 June. The cap will fall by 7% (£117 per year) in the second quarter of 2026, bringing the average annual energy bill to £1,641.

What is the Ofgem energy price cap?

Introduced in 2019, the energy price cap was brought in to set a limit on how much suppliers could charge customers on standard variable tariffs (SVT) for energy. It is a protective measure which aims to shield households from extortionate prices.

It caps the price per kilowatt hour (kWh) for gas and electricity, along with the standing charges for each fuel. It is not a cap on your total energy bill. What you'll pay is mostly determined by your energy usage.

The cap is set every three months, mostly based on wholesale prices. Supplier profit margins, policy costs, and network infrastructure maintenance are also used to set the rate.

Around 33 million households in England, Wales and Scotland are on Standard Variable Tariffs (SVT), according to the latest data from Ofgem, meaning the amount they pay for their energy goes up and down with the price cap.

The remaining 21 million households are on fixed rate tariffs, where you lock in to pay a certain amount for your energy for a set period of time (usually 12 to 18 months) regardless of whether the price cap goes up or down.

We explore whether you should switch to a fixed rate tariff in a separate article.

The average annual price cap figures are purely illustrative. The amount you pay will vary by usage. It will also depend on where you live in the country, as each region has a private operator that runs the mains networks.

There is no price cap in Northern Ireland, instead there is a tariff review process. Households there are regulated by the Utility Regulator.

Here are the average unit rates per kilowatt hour (kWh) and daily standing charges under the current price cap (January to March) and the next confirmed price cap (April to June).

Swipe to scroll horizontally

Row 0 - Cell 0	January - March price cap	April - June price cap
Electricity unit cost	27.69 pence per kWh	24.67 pence per kWh
Electricity standing charge	54.75 pence per day	57.21 pence per day
Gas unit cost	5.93 pence per kWh	5.74 pence per kWh
Gas standing charge	35.09 pence per day	29.09 pence per kWh

Source: Ofgem (confirmed figures). All figures are national averages. Your actual unit rates depend on where in the UK you live. You can find out more about prices in your area on the energy regulator's website.

We go into more detail over whether gas and electricity bills will fall in a separate article.

When is the next Ofgem energy price cap announcement?

Ofgem will announce the next energy price cap, covering July to September by 27 May.

For the period 1 October to 31 December, the announcement will be made by 26 August.

The history of the price cap

The energy price cap was initially put in place to protect vulnerable households. Before the energy crisis, you would only drop onto a variable tariff if you let your fixed deal expire and didn't switch to a new deal.

To prevent consumers in this situation from being overcharged, Theresa May's government brought in the cap in 2019.

However, when the energy crisis hit in late 2021, almost all fixed deals disappeared from the market. This was down to surging wholesale prices, which meant dozens of providers went bust, including Bulb Energy, Zog Energy and Pure Planet.

The fixes that were on offer at this time tended to be much more expensive than variable rate tariffs. As a result, most households dropped onto variable rates and were protected by the cap when their fixes expired.

Things changed again between October 2022 and June 2023, when the government introduced the Energy Price Guarantee (EPG) as a safety net at the height of the energy crisis.

This effectively subsidised suppliers, putting a ceiling on how high charges could go. While the Ofgem price cap soared to a peak of £4,059 per year between January and March 2023, based on typical usage, the average household found itself paying closer to £2,500 per year thanks to the EPG.

Once wholesale costs fell, and the Ofgem cap went below the rate of the EPG in July 2023, households once again found themselves on the price cap rate.

What’s happening with standing charges?

Ofgem is looking to shake up the energy tariffs available to bill payers who want lower standing charges.

Since January 2026, consumers have been given the choice to use an energy tariff with lower standing charges, with the trade-off of paying higher unit rates for their energy.

The energy regulator has warned the change is unlikely to bring about overall savings as the costs are simply being moved to a different part of the bill.

Daniel is a financial journalist at MoneyWeek, writing about personal finance, economics, property, politics, and investing.

He covers savings, political news and enjoys translating economic data into simple English, and explaining what it means for your wallet.

Daniel joined MoneyWeek in January 2025. He previously worked at The Economist in their Audience team and read history at Emmanuel College, Cambridge, specialising in the history of political thought.

In his free time, he likes reading, walking around Hampstead Heath, and cooking overambitious meals.