Wholesale Energy: ~40%
What suppliers pay on gas and electricity markets. The largest component. Driven by global gas prices, Middle East conflict, and LNG supply.
The UK Energy Price Cap
Find out how the Ofgem price cap works, what the current rates are, and how to secure a better deal.
Energy supplier guides
Read our guides to the UK's main energy suppliers before you compare tariffs for your postcode.
The Ofgem Energy Price Cap: Clearly Explained
The energy price cap is a limit set by Ofgem — the UK's energy regulator — on the maximum amount energy suppliers can charge for each unit of gas and electricity used by households on default variable tariffs. It was first introduced in January 2019 to protect customers from being overcharged.
IMPORTANT: The cap does not limit your total energy bill. It only limits the per-unit rates you pay. If your household uses more energy than the Ofgem 'typical' consumption values, your bill will exceed the cap figure regardless of supplier compliance.
The cap limits unit rates and standing charges for Direct Debit, prepayment meter, and standard credit customers. It does NOT cover fixed-rate tariffs, heating oil or LPG, Northern Ireland, business energy, or some specialist time-of-use and green tariffs.
What Does the Ofgem Price Cap Cover?
The cap protects some customers on some tariff types: but not all. Know where you stand.
Ofgem Energy Price Cap: Quarter by Quarter
Ofgem reviews and updates the price cap every three months. Figures are for a typical dual-fuel household paying by monthly Direct Debit.
1
Jan–Mar 2026: £1,758/yr
▲ +0.2% (+£3). Minor cost adjustments. Broadly stable.
2
Apr–Jun 2026: £1,641/yr
Historical. ▼ −6.6% (−£117). Green levy removal and a wholesale fall.
3
Jul–Sep 2026: £1,663/yr
Published quarter, now past. Up £22 on April–June.
4
Oct–Dec 2026 ✦ CURRENT: £1,723/yr
▲ +4% (+£60) vs July–September. Typical dual-fuel Direct Debit. Published 26 August 2026.
Current Ofgem Price Cap Unit Rates & Standing Charges
National Direct Debit averages for England, Scotland and Wales, 1 October to 31 December 2026. Electricity is 0% VAT. Gas includes 5% VAT. Published 26 August 2026.
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Are You Covered by the Energy Price Cap?
Different customer types have different levels of protection under the Ofgem framework.
DD
Direct Debit Customers
Fully protected at the lowest available capped rate. Monthly Direct Debit is the cheapest payment method under Ofgem.
PPM
Prepayment Meter Customers
Fully covered. Since April 2024, PPM rates have been broadly aligned with Direct Debit rates, closing the longstanding gap.
SC
Standard Credit Customers
Covered but at a higher typical bill: £1,861 versus £1,723 for Direct Debit in October–December 2026.
FIX
Fixed Tariff Customers
Not directly subject to the cap. Your rates are fixed at the level agreed when you signed up, this can work for or against you.
BIZ
Business Energy Customers
Not covered. Business energy tariffs operate entirely outside the Ofgem price cap framework. Separate comparison needed.
What Goes Into the Ofgem Price Cap?
Network Costs: ~24%
Maintaining pipes, wires, and grid infrastructure across the UK. Driven by Ofgem RIIO-3 framework and grid upgrade investment.
Operating Costs: ~17%
Billing, metering, customer service, and smart meter operations. Driven by supplier efficiency and smart meter rollout pace.
Policy Costs: ~12%
ECO scheme, Warm Home Discount, and social obligations. From April 2026, the Government moved the ECO levy off household bills into general taxation, reducing this component and contributing to the Q2 2026 cap fall.
VAT
Domestic electricity is 0% VAT from 1 October 2026 to 31 March 2027. Gas remains at 5% VAT. Ofgem says costs cannot be compared directly with earlier quarters because of that change.
Supplier Margin: ~2%
The allowed return for energy suppliers under the Ofgem regulatory framework. The smallest component of your bill.
Does the Ofgem price cap mean you can't overpay for energy?
The price cap limits the unit rates and standing charges a supplier can charge, but it does not cap your total bill. The October–December 2026 headline uses Ofgem's current typical consumption of 2,500 kWh electricity and 9,500 kWh gas. Households that use more pay more. There is no ceiling on the total amount you spend.
More importantly, the price cap is a ceiling, not a target. Fixed tariffs frequently offer unit rates below the cap, meaning switching to a competitive fixed deal can save £100–300 per year compared to the standard variable rate, which sits at the cap.
The cap protects you from the worst-case scenario; it doesn't ensure you're on the best deal. Use Switch to compare fixed tariffs against the cap rate and find out exactly how much you could save.
October to December 2026: The Published Cap
Ofgem has published the 1 October to 31 December 2026 cap. The typical dual-fuel Direct Debit bill is £1,723 a year, up 4% / £60 from £1,663 in July–September. The April–June 2026 cap of £1,641 is historical.
Electricity unit rates for this quarter are 26.32p/kWh with a 54.83p/day standing charge, and they carry 0% VAT until 31 March 2027. Gas is 7.97p/kWh with a 29.68p/day standing charge, still including 5% VAT.
If you are on a standard variable tariff, a fixed deal can sit outside the cap. Compare the annual total at your own usage. Ofgem announces the January–March 2027 cap on 25 November 2026.
UK Energy Price Cap History: 2019 to 2026
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How to Beat the Energy Price Cap
The cap is not a ceiling on your bills: and it is not the lowest rate available. Use these six strategies to pay less.
1
Switch to a Fixed Tariff
Fixed deals sit outside the cap and can be cheaper. Compare the annual total at your usage with the £1,723 typical Direct Debit figure.
2
Get a Smart Meter
Smart meters eliminate estimated bills and enable time-of-use tariffs. Shift appliances to cheaper off-peak periods.
3
Reduce Your Consumption
The cap controls your rate, not your usage. Lower thermostat by 1°C, draught-proof, shift appliances off-peak. Save £200–£400/year.
4
Switch to Direct Debit
If you pay by standard credit, switching to monthly Direct Debit typically saves £100–£150 per year on equivalent usage.
5
Check Energy Support Eligibility
Warm Home Discount, Cold Weather Payment, Winter Fuel Payment, and Household Support Fund are available to qualifying households.
6
Compare When Your Deal Ends
Set a reminder for 49 days before your fixed deal expires, switch without exit fees and secure your next competitive tariff.
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Energy Price Cap: Your Questions Answered
What is the Ofgem energy price cap?
The energy price cap is a limit set by Ofgem on the maximum amount suppliers can charge per unit of gas and electricity on default variable tariffs. It is reviewed every three months and applies to approximately 19 million UK households. It does not cap your total bill — only the unit rate and standing charge.
How much is the energy price cap right now?
When will the energy price cap change next?
Does the energy price cap limit my total energy bill?
Can I beat the energy price cap?
Does the cap apply to fixed-rate tariffs?
Is the price cap the same across the UK?
What happens when the price cap rises?
How is the energy price cap calculated?
What was the July to September 2026 price cap?
Am I on a capped tariff?
How does the price cap affect my fixed tariff?
Should I fix my energy now?
Don't Wait for the Cap to Rise: Compare Now
The October–December 2026 cap is £1,723 a year for a typical dual-fuel Direct Debit household. Comparing tariffs for your postcode is free and takes a few minutes.
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