The energy price cap is the limit Ofgem, the energy regulator for Great Britain, sets on the unit rates and daily standing charges that suppliers can charge households on default tariffs, such as standard variable tariffs. It does not apply to fixed-term deals, and it does not cover Northern Ireland.
How it works
Ofgem calculates the cap from the costs of supplying energy: wholesale gas and electricity, network charges, policy costs, supplier operating costs and a small profit margin. The legal basis is the Domestic Gas and Electricity (Tariff Cap) Act 2018. The cap is reviewed and updated every three months, and each new level is announced about five weeks before it starts.
It is not a cap on your bill. It limits the price of each kilowatt-hour and the daily charge. The more energy you use, the more you pay. Rates also vary by region, payment method and meter type.
The cap from 1 October to 31 December 2026
Averages across England, Scotland and Wales for direct debit customers:
| Unit rate | Daily standing charge | |
|---|---|---|
| Electricity | 26.32p per kWh | 54.83p |
| Gas | 7.97p per kWh | 29.68p |
Electricity figures exclude VAT, because the government has removed VAT from domestic electricity from 1 October 2026 to 31 March 2027. Gas figures include VAT at 5%. Ofgem puts the equivalent annual bill for a household with typical use at £1,723, a 4% rise on the previous quarter. Because of the VAT change, Ofgem says this period cannot be compared directly with earlier ones. The level for January to March 2027 is due to be announced on 25 November 2026.
Why it matters
The cap protects households who never switch from being overcharged, and it acts as a benchmark for comparing other tariffs. It does not guarantee the cheapest deal. This is general information, not financial advice.
Read more: Energy bills this winter: a 4% cap rise, VAT off electricity, and a forecast 16% jump in January.
Track every cap since 2019: energy price cap tracker.