Energy Price Cap Explained: Current Rates and Next Change

What is the energy price cap?

The energy price cap is a limit, set by the regulator Ofgem, on the maximum that an energy supplier can charge for each unit of gas and electricity, and on the daily standing charge, for customers on a standard variable or default tariff. It was introduced to protect households that have not chosen a fixed deal from being charged excessive rates. The cap applies to customers who pay by Direct Debit, by standard credit when a bill arrives, and through a prepayment meter, with the exact rates differing slightly by payment method. It does not apply to anyone on a fixed-rate tariff, whose prices are locked in for the length of their contract. Around 33 million customer accounts are on standard variable tariffs and so are covered by the cap. A crucial point that is often misunderstood is that the cap limits the price per unit of energy and the standing charge, not the total bill. A household that uses more energy will pay more, and one that uses less will pay less, because the headline figure quoted in the news is only an illustration based on a typical level of use. The cap is reviewed and reset every three months to reflect changes in the wholesale cost of energy and other costs of supplying it.

How much is the energy price cap now?

For the period from 1 July to 30 September 2026, the energy price cap is £1,663 a year for a typical household that uses both gas and electricity and pays by Direct Debit. This figure rose by 13% compared with the previous quarter, an increase driven mainly by higher wholesale gas prices linked to conflict in the Middle East. Behind the headline annual figure are the unit rates and standing charges that actually determine a bill. For a customer on a standard variable tariff paying by Direct Debit, electricity is capped at an average of 26.11 pence per kilowatt hour with a daily standing charge of 57.19 pence, and gas is capped at an average of 7.33 pence per kilowatt hour with a daily standing charge of 29.04 pence. These averages cover England, Scotland and Wales and include VAT at 5%, and they vary by region. From 1 July, Ofgem also updated its assumption of typical household energy use, known as the Typical Domestic Consumption Values, to reflect that households are using less energy than before, which is why the typical annual figure is lower than some earlier quoted amounts even though unit rates rose.

What does the cap actually limit?

The cap limits two things: the price a supplier can charge for each unit of energy used, measured in pence per kilowatt hour, and the daily standing charge, which is a fixed daily amount that covers the cost of maintaining the network, meters and other services regardless of how much energy is used. It does not cap the total amount a household pays. This is why bills still vary widely between homes on the same tariff: a large, poorly insulated house with high heating use will pay far more than a small, efficient flat, even though both are protected by the same cap. The annual figure quoted in headlines is based on Ofgem's Typical Domestic Consumption Values, an assumed level of use for an average household, and is intended only as a benchmark. Rates also differ by region, reflecting the cost of running the local network, and by payment method, with Direct Debit usually the cheapest option and prepayment and standard credit priced differently. Understanding that the cap controls rates rather than the final bill helps households see that reducing energy use, rather than relying on the cap alone, is what brings a bill down.

When does the cap change next?

Ofgem reviews the price cap every three months, so it can rise or fall through the year depending on the wholesale energy market. The level for the next period, covering 1 October to 31 December 2026, is due to be published by 26 August 2026 and will take effect from 1 October. Suppliers and customers are given notice ahead of each change so they can prepare. Independent analysts publish predictions for each upcoming cap based on wholesale market prices, and forecasts for the October period have pointed to a modest change, but these are estimates only: the actual figure is not confirmed until Ofgem publishes it. Alongside the October cap, Ofgem has also been consulting on how a government Bill Discount Scheme will be reflected in the cap from October 2026. Because the cap moves each quarter, a rate that looks high or low at one point in the year may change at the next review, which is worth bearing in mind when deciding whether to stay on a variable tariff or move to a fixed deal. The definitive figures for each period are always published on the Ofgem website.

Who is affected and who is not?

The cap affects customers on standard variable or default tariffs, which is the tariff a household falls onto if it has never chosen a deal or if a fixed contract has ended without a new one being arranged. It does not affect customers on a fixed-rate tariff, whose unit rates and standing charges are set for the length of the contract and do not move when the cap changes. A significant share of households are on fixed deals: around 22 million accounts are fixed and therefore unaffected by cap changes. Among those on standard variable tariffs, most pay by Direct Debit, with smaller numbers on standard credit and on prepayment meters, each with slightly different capped rates. Anyone unsure which type of tariff they are on can check a recent bill or their online account, where the tariff name and whether it is fixed or variable are shown. When the cap changes, suppliers must tell affected customers how their unit rates and standing charges will change. Households on prepayment meters or who have difficulty paying can ask their supplier about support, and those in vulnerable circumstances can join the Priority Services Register for extra help.

How to reduce what you pay

Because the cap limits rates rather than the total bill, the main ways to reduce what a household pays are to use less energy and to check whether a cheaper tariff is available. Comparing a fixed deal against the current cap can show whether fixing would cost more or less over the year, though a fixed tariff removes the chance of benefiting if the cap later falls, and some carry exit fees if the customer leaves early. Standing charges apply whatever the usage, so they are part of the comparison. Simple efficiency steps, such as improving insulation, servicing a boiler and using heating controls effectively, reduce the units used and therefore the bill. Support is available for households that are struggling: the Warm Home Discount and other schemes can help with costs, and suppliers must offer help to customers in difficulty. Vulnerable customers can register for the Priority Services Register for additional support. GOV.UK and Ofgem set out the official guidance on switching, on getting help with bills, and on the rights that energy customers have.

For more on cutting energy and household costs, see the Energy, Bills and household costs and Money guides sections, or the Before You checklists.

Frequently asked questions

What is the energy price cap?

The energy price cap is a limit set by Ofgem on the maximum suppliers can charge per unit of gas and electricity, and on the daily standing charge, for customers on a standard variable or default tariff. It does not apply to fixed tariffs.

How much is the energy price cap in 2026?

For 1 July to 30 September 2026 the cap is £1,663 a year for a typical dual-fuel household paying by Direct Debit. Electricity is capped at 26.11p per kWh and gas at 7.33p per kWh, plus daily standing charges.

Does the price cap mean my bill cannot go above a set amount?

No. The cap limits the unit rates and standing charges, not the total bill. If you use more energy you pay more, so your actual cost depends on your usage, region, meter type and payment method.

When will the next energy price cap be announced?

The cap for 1 October to 31 December 2026 is due to be published by 26 August 2026 and takes effect from 1 October. Ofgem reviews and resets the cap every three months.

Does the price cap apply to fixed tariffs?

No. The cap applies only to standard variable and default tariffs. Customers on a fixed-rate tariff keep their agreed rates for the length of the contract, whatever happens to the cap.