The energy price cap is one of the most discussed topics in UK personal finance since 2021. Despite widespread awareness, many people misunderstand how it works — particularly the critical fact that the cap is on the unit rate, not on your total bill. This guide explains the cap clearly and tells you exactly how to interpret your bill in the context of the current cap.
For guidance on challenging a bill increase, see How to Challenge an Energy Direct Debit Increase.
How the price cap works
The price cap sets a maximum price per unit of energy (pence per kWh) and per day (standing charge). Ofgem sets these rates quarterly, and suppliers on default tariffs (standard variable tariffs) cannot exceed them.
The cap is NOT a maximum total bill. It is a maximum rate per unit.
What the cap covers
| Element | Description | Capped? |
|---|---|---|
| Electricity unit rate | p/kWh for electricity consumed | Yes |
| Gas unit rate | p/kWh for gas consumed | Yes |
| Electricity standing charge | p/day fixed access charge | Yes |
| Gas standing charge | p/day fixed access charge | Yes |
| Total annual bill | Depends on usage — varies by household | No — not directly capped |
The ’typical household’ figure
When Ofgem announces a price cap level (e.g. £1,849/year from April 2026), this is based on a typical household using:
- Electricity: 3,100 kWh per year
- Gas: 11,500 kWh per year
Your household’s actual bill will be:
- Higher if you use more energy than typical (larger home, more occupants, electric heating)
- Lower if you use less (smaller home, fewer occupants, efficient appliances)
Current price cap rates (April 2026)
| Element | Credit/Direct Debit | Prepayment |
|---|---|---|
| Electricity unit rate | ~24.50p/kWh | ~24.50p/kWh |
| Electricity standing charge | ~61p/day | ~61p/day |
| Gas unit rate | ~6.24p/kWh | ~6.24p/kWh |
| Gas standing charge | ~31p/day | ~31p/day |
| Typical annual bill | £1,849 | £1,849 |
(Ofgem equalised prepayment and credit meter rates from July 2023. Check ofgem.gov.uk for exact current rates.)
Price cap history
| Quarter | Typical household annual bill |
|---|---|
| Q3 2021 | £1,138 |
| Q4 2021 | £1,277 |
| Q1 2022 | £1,277 |
| Q2 2022 | £1,971 |
| Q3 2022 | £3,549 (Government Energy Price Guarantee limited bills to £2,500) |
| Q4 2022 | £3,549 (EPG: £2,500) |
| Q1 2023 | £3,280 (EPG: £2,500) |
| Q2 2023 | £2,500 |
| Q3 2023 | £2,074 |
| Q4 2023 | £1,834 |
| Q1 2024 | £1,928 |
| Q2 2024 | £1,690 |
| Q3 2024 | £1,568 |
| Q4 2024 | £1,717 |
| Q1 2025 | £1,738 |
| Q2 2025 | £1,849 |
Fixed tariffs and the price cap
The price cap applies only to standard variable tariffs. Fixed tariffs are contracted at a set rate for the term (typically 12–24 months) and are not subject to the price cap.
Should you fix? This depends on whether the available fixed rate is higher or lower than the current and forecast price cap:
- If a fixed rate is below the current cap: fixing is likely worthwhile if you expect the cap to rise
- If a fixed rate is above the current cap: stay on the variable tariff and switch if the cap rises
Fixed tariffs give price certainty but no protection if the cap falls below your fixed rate. Compare carefully — use a comparison site (Uswitch, MoneySuperMarket, Energy Helpline) for live fixed tariff offers.
How to check if you are being charged correctly
- Find your current tariff type (variable or fixed) on your bill or energy account
- Check the unit rates on your bill against the current Ofgem price cap rates
- If you are on a standard variable tariff, your rates should not exceed the cap rates
- If you are on a fixed tariff, your contracted rates may legitimately differ from the cap
To calculate your expected bill:
Estimated annual electricity cost = electricity unit rate × annual kWh + (standing charge × 365)
What to do if you are being overcharged
- Check that your supplier is charging cap rates (or your contracted fixed rate)
- Check that your meter readings are correct — not estimated
- If being overcharged: complain to your supplier in writing
- If unresolved after 8 weeks: contact the Energy Ombudsman (ombudsman-services.org/energy)