What is the energy price cap?

The energy price cap limits the price of a single unit of energy for customers paying for variable energy tariffs.

Under the price cap, typical energy bills for a medium use household are currently around £1,758 per year, or – more helpfully as it's only in place for three months – £147 per month. This is in place from January to March 2026. 

This is a 0.2% increase on the previous price cap that applied between October and December 2025.  

The rise is based on an overall increase across electricity and gas. But there's some nuance behind that; electricity prices have shifted slightly up, while gas prices have shifted slightly down, so the precise change to your bills will depend on how much of each fuel you use. For example, if you use only electricity, you might notice a larger bill increase. 

The price cap is not a limit on your total bill. It restricts the price per unit (or kWh) that energy companies can charge. You can find the average rates below.

Your total bill depends on how much electricity and gas you use. 

The price cap does not apply to fixed tariffs, and we're increasingly seeing deals on the market that would see you paying less than the price capped rates. So if you haven't switched in a while, it's worth finding out how to get the best energy deal.

Use our free, independent energy comparison service to compare gas and electricity prices and find the best provider for you. 

How does the energy price cap work?

The price cap was introduced by Ofgem in 2019 to ensure fair prices for customers who don’t actively switch energy provider to make the most of deals.

The price cap is not a cap on your payments, but a limit on the amount that suppliers can charge for each unit of energy you use and your daily standing charge.

Who does the energy price cap apply to?

It only affects standard variable tariffs (SVTs) - also known as standard, default or out-of-contract tariffs. You might also see them described as rolling or flexible tariffs.

Because competitive fixed deals have been limited in recent years, many households are currently paying variable rates for their energy. However, the proportion has been doing down as the number of fixed deals available has increased. 

According to the latest figures from Ofgem, there are currently around 34 million domestic energy accounts on SVTs and 21 million on fixed tariffs.

Thinking of fixing a tariff instead? Find out how to get the best energy deal or use our energy comparison service to compare gas and electricity prices. 

What is the energy price cap from January 2026?

The energy price cap increased by 0.2% as of 1 January 2026, compared with the previous level. This means that a typical bill for customers paying by direct debit  has increased by around £3.50 a year to £1,758 a year (around £147 a month).

Between 1 January and 31 March 2026 the average unit rates are as follows:

For direct debit customers:

• Electricity: 27.69p per kWh (up from 26.35p) with a standing charge of 54.75p per day (up from 53.68p)
• Gas: 5.93p per kWh (down from 6.29p) with a standing charge of 35.09p per day (up from 34.03p)

If you have a prepayment meter, you pay the same standing charge as direct debit customers, but slightly lower rates per kilowatt hour:

• Electricity: 26.84p per kWh (up from 25.54p) with a standing charge of 54.75p per day (up from 53.68p)
• Gas:  5.72p per kWh (down from 6.06p) with a standing charge of 35.09p per day (up from 34.03p)

This works out as £47 lower than the direct debit cap level.

If you pay when you receive your bills, your rates are the most expensive:

• Electricity: 29.23p per kWh (up from 27.81p) with a standing charge of 62.97p per day (up from 61.82p)
• Gas:  6.25p per kWh (down from 6.62p) with a standing charge of 42.91p per day (up from 41.76p)

This works out as £136 higher than the direct debit cap level.

These are the average prices across England, Scotland and Wales. Your exact rates will depend on where you live.

How providers split the unit rate and standing charge is up to them, and dependent on the region you live in, but the total cost cannot be higher than the cap.

The widely reported figure for the price cap (e.g. £1,758 for January to March 2026) is an illustration based on what it might cost over a year, if rates stayed the same, for a household using a medium amount of energy (defined as 11,500kWh of gas and 2,700kWh of electricity per year). This means your bills might look very different depending on your circumstances.

We've run this electricity price through our appliance test data to show you how much your household appliances will cost to run.

When is the next energy price cap review?

The price cap is adjusted every three months.

Ofgem will announce price cap levels for the period from 1 April 2026 to 31 June 2026 at the end of February 2026.

What's expected for energy prices for the rest of 2026?

In the Autumn Budget, the government announced that funding for the Energy Company Obligation (ECO) and Renewables Obligation (RO) schemes will come to an end.

The funding for these schemes has contributed to the policy costs that make up part of the energy price cap. 

Policy costs are only one factor that affects the energy price cap, along with wholesale energy prices and market dynamics. But, as a result of the government's announcement, expert forecaster Cornwall Insight is predicting a substantial decrease to the price cap in April, to £1,620. This would be a reduction of £138 on annual energy bills for a typical, medium household. 

Further price cap fluctuations are likely throughout the rest of 2026. 

Ways to reduce energy bills

Any cutbacks you can make to your energy usage could help soften the blow of increasing bills. Some ways to do this are:

• Lowering your combi boiler's flow temperature – This small tweak can lower your gas bills while still keeping your home warm. Find out how to adjust your boiler flow temperature.
• Turning down thermostatic radiator valves in unoccupied rooms – Keep the heat you generate in the rooms that need it so that your central heating isn't on for as long. 
• Heat the person, not the home – This isn't possible for all households, but if you are able to, it's usually cheaper to heat yourself rather than the whole house. Look for electric blankets and heaters for quick bursts. 
• Only use white goods efficiently – Try to only put your washing machine and dishwasher on when they're full and use eco settings where possible. Washing at 30^oC or below is usually more energy efficient than hot washes.
• Add loft insulation and draft proofing – Improving your loft insulation is a good way to make your home feel cosier in the winter months and bring down your bills. Draft proofing can be a cheap way to get started.
• Improve your home's energy efficiency– For advice personalised to your home, check how you could make energy saving improvements with our free home energy planning service.  

When it comes to your payments, you might be able to make small savings by opting for paperless bills and managing your account online (as some suppliers charge extra for paper bills). Getting a smart meter installed, or sending regular meter readings, will ensure your bills are accurate. 

Find out more about ways to save on your energy bills and how to get help if you are struggling to pay your energy bills