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.

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. Your total bill will still depend on how much energy you use, but the cap ensures that the rates charged remain within a fair and regulated range.

How does Ofgem decide what the price cap will be?
Ofgem calculates the cap using a transparent methodology that looks at several factors affecting the cost of supplying energy. These include wholesale energy prices, network costs, environmental and social obligations, operating costs for suppliers, and VAT. By reviewing these components regularly, Ofgem aims to ensure that the cap reflects the real cost of supplying energy while protecting consumers from excessive pricing.

Does the energy price cap limit how much I pay overall?
No, the price cap does not limit your total bill. It only limits the price per unit of energy and the daily standing charge. Your total bill will depend on how much gas and electricity you use. If you use more energy, your bill will be higher even if the rates are capped.

Who does the price cap apply to?
The price cap applies to customers on standard variable tariffs (SVTs) and default tariffs. These are usually the tariffs customers are placed on if their fixed-term deal ends and they do not switch to a new one. Customers on fixed-rate tariffs are not directly affected by the cap during the fixed period of their contract.

How often does the price cap change?
Ofgem reviews and updates the price cap every three months. This quarterly review allows the cap to better reflect changes in wholesale energy costs and other factors that affect the cost of supplying energy.

Why does the price cap go up or down?
The price cap changes mainly because of fluctuations in wholesale energy prices, which are the prices suppliers pay to buy gas and electricity. Other factors such as network costs, government policy costs, and supplier operating costs can also influence the cap.

Does the price cap affect all energy suppliers?
Yes. All domestic energy suppliers in Great Britain must comply with the price cap for customers on standard variable or default tariffs.

What is a standard variable tariff (SVT)?
A standard variable tariff is the default tariff that customers are placed on if they have not chosen a fixed-rate or alternative tariff. The price can change when the supplier adjusts its rates, but it must remain within the limits set by the price cap.

Is it better to stay on the price cap or switch tariffs?
That depends on the options available at the time. Sometimes fixed deals may offer better value or price certainty compared to the price cap, but at other times the cap may be lower than available fixed offers. Customers may wish to compare tariffs to see what works best for their situation.

Can suppliers charge less than the price cap?
Yes. The price cap is a maximum limit, not a target price. Suppliers can choose to offer tariffs with rates below the cap if they wish.

Does the price cap apply in Northern Ireland?
No. The energy market in Northern Ireland is regulated differently, so the Ofgem price cap applies only in Great Britain (England, Scotland, and Wales).

What costs are included in the price cap calculation?
The calculation includes wholesale energy costs, network charges, environmental and social policy costs, supplier operating costs, and VAT. Ofgem publishes a detailed breakdown of these components when announcing each new cap level.

Does the price cap include standing charges?
Yes. The cap limits both the unit rates for energy and the daily standing charge that suppliers can apply.

What is a standing charge?
A standing charge is a fixed daily cost that covers the cost of maintaining the energy network, metering services, and other infrastructure needed to supply energy to homes.

Will my bill automatically change when the price cap changes?
If you are on a standard variable tariff, your unit rates and standing charges may change when the price cap is updated. Your supplier will normally inform you if this happens.

What happens if wholesale energy prices fall?
If wholesale prices fall significantly, Ofgem may lower the price cap during its next quarterly review. This can lead to lower unit rates and standing charges for customers on capped tariffs.

What happens if wholesale prices rise?
If wholesale prices increase, the price cap may rise during the next review to reflect higher supply costs. This can lead to higher rates for customers on standard variable tariffs.

How can I reduce my energy bill?
Customers can reduce their bills by using less energy, improving home energy efficiency, or switching to a tariff that better suits their usage.

Will my Direct Debit change?
Not automatically. We review direct debits periodically to ensure you're paying the right amount for your consumption. If we need to make a change to your payment amount, we will provide you with more information at the time of the change.

Will the price cap exist forever?
The price cap was introduced as a temporary measure to protect consumers. The government and Ofgem periodically review whether it is still necessary as market conditions change.

Can businesses benefit from the price cap?
No. The domestic price cap applies only to residential customers. Businesses are not covered by the same regulation.

How can I check if I’m on a capped tariff?
You can check your tariff details on your energy bill or through your supplier’s online account portal. If you are on a standard variable tariff, the price cap will apply.

What should I do if I think my supplier is charging more than the cap?
You should contact your supplier first to query the charges. If the issue is not resolved, you may be able to escalate the complaint to the Energy Ombudsman.

Will switching supplier affect the price cap?
If you switch to another supplier but remain on a standard variable tariff, the price cap will still apply. If you switch to a fixed tariff, the cap does not apply during the fixed term.

What role does Ofgem play in the energy market?
Ofgem is the energy regulator for Great Britain. It protects consumers, ensures fair competition among suppliers, and regulates aspects of the energy market such as the price cap.

Are regional differences included in the price cap?
Yes. The price cap levels can vary slightly depending on where you live due to differences in network costs across regions.

Does the cap include VAT?
Yes. VAT is included in the price cap calculation.

Can my supplier change my tariff without telling me?
Usually, no. If a change is made to your prices or terms and the change is not to your benefit, your supplier must  must notify customers in advance of any changes to tariff rates or terms that are not beneficial to the customer.

How can I stay informed about price cap changes?
Ofgem publishes announcements on its website each time the price cap is reviewed, and suppliers usually inform customers directly if their rates will change.

Will recent geopolitical events cause the April price cap to change?
No. Rest assured, the price cap for April 2026 has been decided on, and this will not increase during the current price cap period. The next update will be for July 2026, and information will be shared ahead of 01/07/2026 to make you aware of any additional changes.

What impact do government policies have on the price cap?
Government policies, such as environmental or social schemes, can affect supplier costs and therefore influence the price cap calculation.

Will government support schemes affect the price cap?
The reduction linked to the Government’s policies is applied separately from the cap calculation. The price cap itself reflects supplier costs, while support schemes may reduce what customers pay.

Will confirmation be provided to each customer?
Yes. Customers will be able to see the updated unit rates and standing charges on their bills or in their online account when changes are applied.

I am on a fixed tariff. How will I know if my rates have been reduced?
You will see a reduction in your prices effective from 01/04/2026, and your first bill after 01/04/2026 will reflect these updated prices.

Is the reduction calculated in the annual cost?
The reduction is applied directly to the unit rate or standing charge rather than being calculated separately in the annual cost figure.