TL;DR
Ofgem has announced changes to the energy price cap. This guide explains the new unit rates, who is affected, how the cap works, and what steps households can take to reduce their bills.
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Ofgem, the gas and electricity regulator for Great Britain, sets a price cap on the rates that energy suppliers can charge domestic customers on default tariffs. The cap is reviewed quarterly and applies to the unit rate for gas and electricity, as well as the daily standing charge. A change to the cap affects the bills of the approximately 29 million households on default or standard variable tariffs.
How the Price Cap Works
The price cap does not set a limit on the total amount a household pays. It caps the maximum unit rate in pence per kilowatt hour and the maximum standing charge in pence per day. A household that uses more energy will pay more, even under the cap. Ofgem publishes cap levels for each region of Great Britain, though the variation between regions is relatively small.
For Q3 2025 (July to September 2025), the cap was set at an annualised equivalent of 1,568 pounds for a typical household using 11,500 kilowatt hours of gas and 2,700 kilowatt hours of electricity per year. Cap levels are updated quarterly based on wholesale energy market prices using Ofgem's published methodology.
Who Is Affected
The cap applies to households on standard variable tariffs and default tariffs, including those who have never switched supplier or whose fixed-term deal has ended. Customers on fixed-rate tariffs agreed before the cap announcement are not immediately affected, though their rate may change when the fixed term ends. Prepayment meter customers are subject to a separate but linked cap level.
Steps to Reduce Energy Bills
Households can reduce exposure to cap increases by switching to a fixed-rate tariff when one is available at a price below the projected cap level. Ofgem publishes forward projections of the cap to help consumers compare fixed deals. The government's Great British Insulation Scheme provides support for home insulation improvements that reduce consumption. The Warm Home Discount offers a 150-pound reduction on energy bills for eligible low-income households.
Prepayment Meters
Ofgem introduced protections for prepayment meter customers following the 2023 enforcement action against British Gas. Suppliers are prohibited from forcibly installing prepayment meters in the homes of vulnerable customers without explicit consent. Prepayment rates are capped at the same level as direct debit rates following regulatory intervention.
Where to Check the Current Cap
The current cap level, unit rates by region, and the next scheduled review date are published by Ofgem at www.ofgem.gov.uk. The GOV.UK page at www.gov.uk/get-help-energy-bills provides information on support schemes available to households struggling with energy costs.
Frequently Asked Questions
Does the energy price cap limit my total bill?
No. The cap limits the unit rate per kilowatt hour and the daily standing charge. A household using more energy will pay more even when the cap applies.
How often is the Ofgem price cap reviewed?
Ofgem reviews the price cap quarterly, with changes taking effect in January, April, July, and October each year.
Can I avoid a price cap increase by switching tariff?
Switching to a fixed-rate tariff below the projected cap level can protect against increases for the duration of the fixed term. Comparison sites and Ofgem forward projections can help identify available deals.
