January 2026 Price Cap: Your Questions Answered
| 1. | What is the energy price cap? |
| The energy price cap is a limit set by Ofgem on the unit rates and standing charges that suppliers can charge customers on a standard variable tariff. It was introduced during the energy crisis to protect households from paying significantly above fair market levels. It’s important to note that it isn’t a cap on your total bill – your final cost will still depend on how much energy you use. Instead, the cap ensures that the price per unit of gas and electricity can’t exceed the published maximums, giving customers stability and transparency, especially during periods of market volatility. | |
| 2. | How does the energy price cap work? |
| The price cap sets the maximum amount suppliers can charge per unit of gas and electricity, plus the standing charge you pay each day just for being connected. Ofgem reviews these costs regularly to make sure they reflect what it actually costs to supply energy. If the underlying costs go up or down, the cap changes with them. You still pay for the energy you use – so your bill can be higher or lower depending on your consumption – but the cap stops the unit prices themselves from shooting beyond the allowed limit. | |
| 3. | How does Ofgem decide what the price cap will be? |
| Ofgem works out the price cap by looking at all the real-world costs involved in supplying energy, things like the wholesale price of gas and electricity, the cost of running and maintaining the networks, government schemes, and the day-to-day expenses of supplying customers. They add all of this up, check it against the latest market data, and then set the cap at a level that covers those costs without letting suppliers overcharge. In short, it moves up or down depending on what it genuinely costs to get energy to your home. | |
| 4. | When should I submit my readings to avoid an estimated bill? |
| To make sure your bill reflects your actual usage when the new price cap comes into effect, it’s best to take meter readings on the last day of the current cap period and submit them within the first couple of days of the new one. For example, we advise customers to take readings on 31/12/2025 and submit them by 03/01/2026. We’ll always give you the exact dates ahead of each cap change, but the principle stays the same: read on the final day, submit shortly after, and you’ll avoid estimated charges. | |
| 5. | Will I be affected by the energy price cap? |
| You’ll only be affected by the energy price cap if you’re on a Standard Variable Tariff (SVT). For our customers, that means you’re on Fair Variable if you pay by Direct Debit, or Pay on Bill Fair Variable if you pay on receipt of bill. The cap doesn’t apply to fixed-rate tariffs, where your prices are already locked in for the duration of your contract. If you’re not sure which tariff you’re on, you can check quickly in your online account or on your latest bill. If you are on an SVT, the cap will directly influence the unit rates and standing charges you pay when it changes. If you’re on a fixed tariff, your prices will stay the same until your deal ends. | |
| 6. | Are any suppliers exempt from the price cap? |
| Most energy suppliers have to follow the price cap, but Ofgem does allow a small number of specialist green providers to charge above the cap if they meet strict criteria. These are usually companies that buy all their energy from renewable generators and follow higher environmental standards. Think of it a bit like paying extra for organic produce at the market; you’re choosing a greener option, and the rules recognise that their costs can be different. For the vast majority of customers and suppliers, though, the standard price cap still applies. | |
| 7. | How is the energy price cap determined? |
| The price cap is mainly based on what it costs suppliers to buy energy on the wholesale market over the previous few months. Ofgem looks at these market prices, along with things like network charges, government schemes, and the basic costs of running an energy supplier. They bundle all this together to work out a fair maximum for unit rates and standing charges. In short: when the cost of buying and delivering energy rises, the cap tends to rise; when those costs fall, the cap usually follows. | |
| 8. | Does the price cap mean I don't need to switch? |
| The price cap is designed to make sure customers on a Standard Variable Tariff are paying a fair, regulated rate; so you’re not being overcharged if you stay where you are. Whether you switch is always your choice, but being on an SVT means your prices track the cap and reflect the latest market conditions without locking you into a long contract. Fixed tariffs can offer certainty, but they don’t always guarantee a saving compared to the capped rate. If you’re on our Fair Variable or Pay on Bill Fair Variable, you’re already protected by the cap and can simply keep an eye on things without feeling pressured to move unless a fixed deal genuinely suits your circumstances. | |
| 9. | Does an energy price cap limit my total energy bill? |
| No. The price cap does not limit your total bill. It only limits the unit rates and standing charges that suppliers can charge on a Standard Variable Tariff. Your final bill will always depend on how much gas and electricity you actually use. Think of it like a price tag on groceries: the cap sets the price per item, but your total shop still depends on how much you put in the trolley. So even with the cap in place, using more energy will mean a higher bill, and using less will mean a lower one. | |
| 10. | Is my monthly bill value protected by the price cap? |
| Your monthly bill itself isn’t capped, but the prices used to calculate it are - as long as you’re on a Standard Variable Tariff. The price cap controls the unit rates and standing charges your supplier can use, and your monthly bill is simply your energy use multiplied by those capped rates. So while the cap influences your monthly cost, it doesn’t place a limit on the amount you pay each month, because that still depends on how much energy your household uses and, if you’re on a budget plan, how your monthly payment is spread across the year. | |
| 11. | Will the price cap change? |
| Yes. Ofgem reviews the energy price cap every three months to make sure it reflects the real cost of supplying energy. This regular review means customers benefit more quickly when wholesale prices fall; but it also means the cap can rise if those underlying costs increase. Each review sets the cap for the next quarter, so it naturally moves up or down in line with what’s happening in the wider energy market. | |
| 12. | Can I still pay less than the current energy price cap for my gas and electricity? |
| Yes. The price cap is simply the upper limit on what suppliers are allowed to charge on a Standard Variable Tariff, and Home Energy offers the most competitive tariffs on the market. If you’re on our Fair Variable (or Pay on Bill Fair Variable), you’re already on a tariff that adjusts with the cap and reflects current market conditions. Your bill or online account will always show if there’s an alternative tariff available to you, but there’s no need to switch unless you actively want something different. Many customers are happy staying on the SVT for the flexibility and the reassurance that prices will always stay in line with the wider market. Please visit your online account to see our current market leading offers. | |
| 13. | How will I know if the price cap changes? |
| Whenever the price cap changes, we’ll make sure you’re kept fully informed. We send updates by email, letter, and through your online account, clearly explaining any changes to your unit rates or standing charges. If you receive paper bills, the information will also appear on your next statement. In addition, Ofgem publishes each new cap level publicly, and we update our website to reflect the latest figures. You don’t need to do anything, we’ll always contact you directly ahead of the change so you know exactly what’s happening and when it will take effect. | |
| 14. | How can I check if I am being charged correctly as per the price cap? |
| We include our unit rates and standing charges in every customer communication, so you can compare what you’re paying. If you’d like to double-check yourself, you can find the latest price cap information at the Ofgem website: https://www.ofgem.gov.uk/information-consumers/energy-advice-households/energy-price-cap-explained | |
| 15. | Where can I find my current prices? |
| Your current unit rates and standing charges are shown on every bill you receive, and you can also view them at any time in your online account or through our app. If you haven’t downloaded it yet, you can find our app on both the Apple App Store and Google Play Store. Once you’re logged in, your current prices, usage details, and past bills are all available in one place, making it easy to keep track of what you’re paying. | |
| 16. | What is the current energy price cap? |
| From 1 January 2026, the energy price cap only changes a tiny amount overall, the typical dual-fuel bill goes up by just £3 a year, so it’s basically staying where it is. The reason it moves at all is because some of the costs behind the scenes have shifted. Electricity is a bit more expensive this time because the cost of running and upgrading the power networks is rising, and the country is investing more in things like future low-carbon and nuclear projects. Gas, on the other hand, is cheaper than before, because wholesale gas prices have fallen. When you put the two together -pricier electricity but cheaper gas. They mostly cancel each other out, which is why the overall dual-fuel change is so small. | |
| 17. | How will I know if the energy price cap applies to me? |
| The price cap applies to you if you’re on a Standard Variable Tariff (SVT) and for us, that’s Fair Variable if you pay by Direct Debit, or Pay on Bill Fair Variable if you pay on receipt of bill. If you haven’t actively signed up to a fixed-term contract, or if you’re not quite sure which tariff you’re on, then you’re most likely on the SVT and the price cap will apply automatically. You can double-check at any time by looking at your latest bill or logging into your online account, where your tariff name is clearly shown. If it says “Fair Variable” or “Pay on Bill Fair Variable,” the price cap applies to you. If it lists a specific tariff with an end date, then you’re on a fixed deal instead. | |
| 18. | When is the next energy price cap? |
| The current price cap takes effect from 1 January 2026. The next update will begin on 1 April 2026, as Ofgem reviews the cap every three months. We usually contact customers in early March with a clear breakdown of any changes for the upcoming period, so you’ll have plenty of notice before the new rates start. You don’t need to do anything, we’ll always let you know directly whenever a new cap is coming into effect. | |
| 19. | What are the factors affecting the energy price cap? |
| The energy price cap moves up and down based on the real costs of getting energy to your home. The biggest influences are the wholesale price of gas and electricity, the cost of running and maintaining the energy networks, and various government schemes and policies that suppliers have to fund. When these underlying costs rise, the cap usually rises; when they fall, the cap tends to come down. It’s essentially Ofgem’s way of making sure prices reflect what it genuinely costs to supply energy - no more, no less. | |
| 20. | How often does the energy price cap change? |
| The energy price cap is reviewed and updated every three months. Ofgem looks at the latest costs of supplying energy and then sets the cap for the next quarter. This means the cap typically changes four times a year; in January, April, July and October. | |
| 21. | Should I stay on a variable before the next energy price cap? |
| It really depends on what you prefer. Many customers choose to stay on our Standard Variable Tariff because it offers flexibility, no long-term commitment, and automatically tracks the energy price cap, so your prices move in line with the wider market every quarter. A fixed tariff can give price certainty for a set period, but it won’t always work out cheaper than the capped rate. If you’re happy with flexibility and want your prices to adjust with each cap update, staying on the SVT is a perfectly sensible choice. If you prefer the reassurance of knowing exactly what you’ll pay each month, a fixed tariff might suit you better. Whatever you choose, your online account will always show your available options clearly. | |
| 22. | How does it affect different customers? |
| The impact depends mainly on the type of tariff you’re on. If you’re on our Standard Variable Tariff (Fair Variable or Pay on Bill Fair Variable), the price cap directly affects the unit rates and standing charges you pay, so your prices will move up or down every time the cap changes. If you’re on a fixed-term tariff, the price cap won’t affect you until your fixed deal ends your prices stay the same for the length of your contract. For most customers on the SVT, the cap simply keeps costs in line with the wider energy market each quarter, while fixed-tariff customers only see changes when they choose a new tariff. Either way, we make sure all your prices are clearly shown on your bill and in your online account. | |
| 23. | How has the price cap level changed over time? |
| The price cap has moved quite a lot over the past few years, especially during the energy crisis when wholesale prices went through the roof. During that period, the cap was one of the main things that protected households from the full impact of those extreme spikes; without it, bills would have risen far higher and far faster. Since then, the cap has gone through a series of rises and falls as energy costs have settled and shifted. In quieter market periods, the cap tends to move more gently, going up when underlying costs rise and down when they fall. In short, it’s been a bit of a rollercoaster at times, but the purpose has always been the same: to shield customers from unfair prices and keep bills more stable than the market alone would allow. | |
| 24. | What is the current energy price cap and where is it going to be in the next quarter? |
| The energy price cap is currently £1,755 a year for an average medium-usage dual-fuel household, based on Ofgem’s Typical Domestic Consumption Values. From 1 January 2026, this will change only slightly to £1,758 a year, a small increase of just £3. This reflects minor shifts in the underlying costs of supplying energy, with higher electricity costs being largely balanced out by lower gas costs. For most households, the overall impact is minimal. | |
| 25. | Will the price cap be displayed on my energy bill? |
| We don’t normally show the price cap figure itself on your bill, but all the important information you need is clearly displayed, including your unit rates, standing charges, and the name of the tariff you’re on. This means you can easily compare your prices with the cap if you ever want to check. We also contact you directly whenever the cap changes, so you’ll never be left in any doubt about how it affects your bill. | |
| 26. | What are the unit rates going to be? |
| Unit rates vary depending on where you live and the type of meter and payment method you use. For example, prices differ between regions, and will not be the same for customers on a Standard meter versus Economy 7, or for those paying by Direct Debit compared with paying on receipt of bill. We’ll make sure you receive a full breakdown of your exact energy rates before any changes are applied, so you know exactly what to expect. If you’d like to cross-reference your rates with the published figures, you can find the official price cap information on Ofgem’s website: https://www.ofgem.gov.uk/information-consumers/energy-advice-households/energy-price-cap-explained |
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| 27. | Would it be better for me to pay by direct debit? |
| In most cases, yes. Paying by Direct Debit is usually the cheapest way to pay for your energy, as the rates are lower than paying on receipt of bill. For example, if you currently pay when your bill arrives, your costs are likely higher than they would be on Direct Debit. Around 93% of our customers already choose this option, and on average it can save you around 7% a year. Switching is quick and easy to do and once set up, your payments are taken automatically, helping you keep on top of your account and reduce your overall costs. |
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