| Energy Bills |
The energy price cap limits the maximum unit rate and standing charge suppliers can bill for standard variable tariffs. From October to December 2026, the cap for a typical dual fuel household paying by Direct Debit is £1,723 per year. This figure is not a saving or discount; it is the benchmark annual cost for average energy use.
The energy price cap limits unit rates and standing charges; from Oct to Dec 2026, the typical annual bill is £1,723.
KEY FACTS
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LAST REVIEWED 2026-09-06
What is the energy price cap?
The energy price cap is a limit set by Ofgem on the maximum amount suppliers can charge for each unit of energy and the daily standing charge on standard variable tariffs. From October to December 2026, the cap for a typical dual fuel household paying by Direct Debit is £1,723 per year. This is not a saving or discount; it is the benchmark annual cost for average energy use.
The cap applies to the unit rates (pence per kWh) and standing charges (pence per day) that suppliers can bill. It does not cap the total bill; households using more than typical will pay more, and those using less will pay less. The cap is reviewed quarterly by Ofgem, with changes announced in advance.
The cap was introduced in January 2019 to protect customers on default tariffs from excessive charges. It applies to England, Wales, and Scotland. Northern Ireland has a separate arrangement. The cap is set based on wholesale energy costs, network costs, policy costs, and supplier operating costs.
To check if the cap applies, look at the energy bill: if the tariff is a standard variable or default tariff, the cap applies. Fixed tariffs are not subject to the cap, but they are also not protected by it.
How does the energy price cap work?
The energy price cap works by setting a maximum unit rate and standing charge for each fuel. For the period October to December 2026, the typical annual bill for a dual fuel household is £1,723. This is based on typical domestic consumption values of 2,500 kWh of electricity and 9,500 kWh of gas per year.
The cap is calculated by Ofgem using a formula that includes wholesale energy costs, network costs, operating costs, and policy costs. The cap is adjusted every three months to reflect changes in these costs. The change from the previous cap period (July to September 2026) is an increase of 4%.
Suppliers must set their standard variable tariff rates at or below the cap. They cannot charge more than the cap for the unit rates and standing charges. However, suppliers can offer fixed tariffs that are not capped, but these are typically priced based on market conditions.
To check how the cap affects a specific bill, compare the unit rate and standing charge on the bill to the cap levels. If the rates are above the cap, the supplier is in breach and the customer should contact Ofgem.
| Cap period | Typical dual fuel, Direct Debit | Change | Source |
|---|---|---|---|
| Jul to Sep 2026 | £1,663 | Ofgem | |
| Oct to Dec 2026 | £1,723 | 4% | Ofgem |
| From 1 Jan 2027 | to be announced late November 2026 | Ofgem |
What is the energy price cap for October to December 2026?
For the period October to December 2026, the energy price cap for a typical dual fuel household paying by Direct Debit is £1,723 per year. This is an increase of 4% compared to the previous cap period (July to September 2026), which was £1,663.
The cap is based on typical domestic consumption values (TDCV) of 2,500 kWh of electricity and 9,500 kWh of gas per year. Actual bills will vary depending on actual usage. The cap is not a cap on total bills; it caps the unit rates and standing charges.
The cap levels are set by Ofgem and are announced in advance. The cap for January 2027 onwards is to be announced late November 2026. Households on standard variable tariffs will see their rates change automatically when the cap changes.
To check the exact cap rates for a specific region, visit the Ofgem website or contact the supplier. The cap rates vary by region due to network costs.
What are the standing charges under the October to December 2026 cap?
Standing charges are daily fixed costs that cover the cost of connecting to the energy network, maintaining the grid, and other fixed costs. Under the October to December 2026 cap, the average standing charge for electricity is 54.8p per day, and for gas it is 29.7p per day. For a dual fuel household, the combined average standing charge is 84.5p per day.
Standing charges are included in the typical annual bill of £1,723. They are not optional; every household pays them regardless of energy usage. The standing charge covers costs such as metering, network maintenance, and supplier administrative costs.
The standing charge rates are averages; actual rates vary by region and payment method. The cap also includes VAT: electricity is subject to 0% VAT until 31 March 2027, while gas is subject to 5% VAT. The standing charge makes up about 18% of a typical bill.
To check the standing charge on a bill, look for the daily pence rate. If it is above the cap, the supplier is overcharging.
How is the energy price cap calculated?
Ofgem calculates the energy price cap using a formula that estimates the cost of supplying energy to a typical household. The main components are wholesale energy costs, network costs, policy costs, and supplier operating costs. The cap is set to allow suppliers to recover their efficient costs plus a reasonable profit margin.
For the October to December 2026 cap, the typical annual bill is £1,723. This is based on the wholesale prices for the period, which have increased compared to the previous quarter, leading to a 4% rise. The cap is reviewed every three months to reflect changes in wholesale prices.
The calculation uses a typical domestic consumption value (TDCV) of 2,500 kWh electricity and 9,500 kWh gas. The cap is expressed as an annual figure for a typical household, but the actual cap is on unit rates and standing charges.
To understand the calculation, one can look at Ofgem's published methodology, which details the cost components and how they are weighted.
What is the difference between the price cap and a fixed tariff?
The energy price cap applies to standard variable tariffs (SVTs) and default tariffs. It limits the unit rates and standing charges that suppliers can charge. Fixed tariffs are not subject to the cap.
From October to December 2026, the cap for a typical dual fuel household is £1,723. A fixed tariff might be higher or lower than this, depending on when it was taken out. Fixed tariffs offer price certainty, protecting against future cap increases, but they may be more expensive than the current cap.
When the cap rises, as it does by 4% in October 2026, households on SVTs see their bills increase automatically. Those on fixed tariffs are unaffected until the fix ends. However, fixed tariffs often come with exit fees.
To decide between the two, compare the unit rates and standing charges of the fixed tariff to the cap rates. Also consider the length of the fix and any exit fees.
| Fuel | Average standing charge (Oct to Dec 2026) | VAT / share | Source |
|---|---|---|---|
| Electricity | 54.8p per day | 0% VAT to 31 Mar 2027 | Commons Library |
| Gas | 29.7p per day | 5% VAT | Commons Library |
| Dual fuel | 84.5p per day | 18% of a typical bill | Commons Library |
How does the energy price cap affect the bill?
The energy price cap affects a bill by limiting the unit rates and standing charges that a supplier can charge on a standard variable tariff. If the supplier's rates are at the cap, the bill will reflect the cap levels. For a typical household using 2,500 kWh electricity and 9,500 kWh gas, the annual bill under the October to December 2026 cap is £1,723.
If a household uses more energy than the typical consumption, the bill will be higher than £1,723. If it uses less, the bill will be lower. The cap does not limit the total bill; it limits the price per unit and the daily standing charge.
The cap also includes VAT: electricity is charged at 0% VAT until 31 March 2027, while gas is charged at 5% VAT. The standing charge makes up about 18% of a typical bill.
To see how the cap affects a specific bill, multiply the unit rate by the kWh used and add the standing charge multiplied by the number of days. Compare this to the cap levels.
When does the energy price cap change?
The energy price cap is reviewed and updated every three months by Ofgem. The changes take effect on 1 January, 1 April, 1 July, and 1 October each year. For 2026, the cap periods are: January to March, April to June, July to September, and October to December.
The October to December 2026 cap is £1,723, an increase of 4% from the previous period. The next change will be on 1 January 2027, with the new cap level to be announced late November 2026.
Ofgem announces the new cap levels about four weeks before they take effect. This gives suppliers time to update their rates and customers time to consider their options.
To stay informed, check the Ofgem website or news outlets for announcements. The cap changes are based on wholesale energy prices, which can fluctuate.
How can I check if I am on the energy price cap?
To check if a household is on the energy price cap, look at the energy bill. If the tariff is described as a standard variable tariff, default tariff, or 'variable', it is likely subject to the cap. Fixed tariffs are not subject to the cap.
From October to December 2026, the cap for a typical dual fuel household is £1,723. If the bill shows unit rates and standing charges that are at or below the cap levels, the supplier is complying. If the rates are above the cap, the supplier is in breach.
The cap levels are published by Ofgem. Compare the bill's unit rates (pence per kWh) and standing charges (pence per day) to the cap rates for the region. The cap rates vary by region due to network costs.
If a household is on a standard variable tariff, the supplier should automatically apply the cap. If not, contact the supplier or Ofgem.
What should I do if the energy bill is above the price cap?
If a household believes its energy bill is above the price cap, the first step is to check the tariff type. If it is a standard variable tariff, the unit rates and standing charges should be at or below the cap. For October to December 2026, the typical annual bill is £1,723, but actual bills vary with usage.
Compare the bill's unit rates and standing charges to the cap levels published by Ofgem. If the rates are above the cap, the supplier is overcharging. Contact the supplier to correct the bill. If the supplier does not resolve the issue, contact Ofgem for assistance.
It is also possible that the bill is higher because of higher energy usage, not because of rates. Check the meter readings and ensure they are accurate.
Households on fixed tariffs are not protected by the cap, but they have agreed to the rates in their contract.
Glossary: the terms on an energy bill explained
Energy price cap: A limit set by Ofgem on the maximum unit rates and standing charges that suppliers can charge on standard variable tariffs.
Standard variable tariff (SVT): A default energy tariff with no fixed end date, subject to the price cap. Rates can change with the cap.
Fixed tariff: An energy contract with set unit rates and standing charges for a fixed period, not subject to the price cap.
Standing charge: A daily fixed cost on energy bills covering network maintenance, metering, and supplier costs, regardless of usage.
Typical domestic consumption values (TDCV): Standard annual energy usage figures (2,500 kWh electricity and 9,500 kWh gas) used to illustrate typical bills.
Ofgem: The Office of Gas and Electricity Markets, the UK energy regulator that sets and reviews the price cap.
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Disclaimer. This guide is editorial information drawn from primary sources. It is not financial, legal or tax advice and does not recommend any provider. Figures are those published by the named sources on the review date and may change. Kael Tripton Ltd receives no commission, referral fee or lead payment from any provider named on this page. |
Frequently asked questions
What is the energy price cap for 2026?
The energy price cap for October to December 2026 is £1,723 for a typical dual fuel household paying by Direct Debit. This is based on typical usage of 2,500 kWh electricity and 9,500 kWh gas. The cap is not a limit on total bills; it limits the unit rates and standing charges. The previous cap period (July to September 2026) was £1,663, so this is a 4% increase.
How often does the energy price cap change?
The energy price cap is reviewed and updated every three months by Ofgem. Changes take effect on 1 January, 1 April, 1 July, and 1 October. The cap for January 2027 will be announced late November 2026. The cap reflects changes in wholesale energy prices, network costs, and other factors.
Does the energy price cap apply to fixed tariffs?
No, the energy price cap applies only to standard variable tariffs and default tariffs. Fixed tariffs are not subject to the cap. Fixed tariffs offer price certainty for a set period, but they may be higher or lower than the cap. When the cap rises, fixed tariff customers are unaffected until their fix ends.
What is the standing charge under the October to December 2026 cap?
Under the October to December 2026 cap, the average standing charge for electricity is 54.8p per day, and for gas it is 29.7p per day. For dual fuel, the combined average is 84.5p per day. Standing charges cover fixed costs like network maintenance and metering. They are included in the typical annual bill of £1,723.
How is the energy price cap calculated?
Ofgem calculates the cap using wholesale energy costs, network costs, policy costs, and supplier operating costs. The cap is set to allow suppliers to recover efficient costs plus a margin. For October to December 2026, the typical bill is £1,723, based on typical consumption. The cap is reviewed quarterly.
What is the difference between the price cap and a fixed tariff?
The price cap limits rates on standard variable tariffs, while fixed tariffs have set rates for a period. The cap can change every three months, but a fixed tariff stays the same until it ends. Fixed tariffs may have exit fees. From October to December 2026, the cap is £1,723, but fixed tariffs could be higher or lower.
