What is the energy price cap (UK)?
The Ofgem energy price cap limits the maximum unit rates and standing charges suppliers can charge most households on standard variable tariffs (SVTs) and default tariffs. It’s not a cap on your total bill—your usage still matters.
- Applies mainly to standard variable/default tariffs (not most fixed deals)
- Cap level varies by region, payment method and meter type
- Best used as a benchmark when deciding whether to stay, switch, or fix
Figures and examples are illustrative and may not match current cap levels. Actual rates depend on your region, meter type and payment method.
Fast answer: what the energy price cap actually is
The energy price cap is set by the UK regulator Ofgem. It limits the maximum unit price (pence per kWh) and standing charge (pence per day) energy suppliers can charge households on standard variable tariffs (SVTs) and default tariffs.
Important: The cap is not a limit on your total bill. If you use more energy, you pay more—even if your tariff is capped.
Key takeaways
- Changes periodically (Ofgem updates cap levels on a schedule).
- Rates differ by electricity vs gas, region, payment method and meter type.
- You can usually switch away from a capped SVT to a fixed deal (check exit fees).
- The cap includes suppliers’ wholesale costs, networks, policy costs and a margin—so it can move up or down.
What it does and doesn’t do
- It does
- Limit maximum unit rates and standing charges on SVTs/default tariffs.
- It doesn’t
- Guarantee the cheapest deal, cap fixed tariffs, or protect you from higher bills if you use more energy.
How the price cap works (plain English)
Think of the price cap as a maximum price list for suppliers: the most they can charge for each unit of gas and electricity and the daily standing charge—for certain tariffs.
What tariffs are covered?
- Covered: Standard variable tariffs (SVTs) and default tariffs (including many “deemed” or out-of-contract rates).
- Usually not covered: Most fixed-rate tariffs (your supplier sets these competitively, within wider market rules).
Why the cap differs between households
Ofgem sets different cap levels because typical costs vary. Your personal rates depend on:
- Where you live (regional network costs)
- Payment method (Direct Debit, standard credit, prepayment)
- Meter type (credit meter, prepayment meter, smart meter operating in prepay mode, etc.)
- Fuel type (electricity only, gas only, or dual fuel)
Standing charges matter. Even if you use very little energy, standing charges can make up a sizeable part of your bill—especially for low-usage homes or empty properties.
How the cap affects your bill
Your annual cost is broadly:
(Unit rate × kWh used) + (Standing charge × days)
Because the cap limits the rates, not the total, households using more energy will still pay more overall.
Two realistic scenarios (with numbers)
These examples show how unit rates + standing charges add up. They’re illustrative (not today’s cap) and assume a 30-day month. Your rates vary by region, payment method and meter type.
Scenario A: low-usage flat (electricity only)
- Electricity unit rate: 24p/kWh (estimated)
- Electricity standing charge: 50p/day (estimated)
- Monthly use: 150 kWh
Estimated monthly cost: (150 × £0.24) + (30 × £0.50) = £36.00 + £15.00 = £51.00
Why it matters: for low usage, the standing charge can be a big share of the bill.
Scenario B: family home (dual fuel)
- Electricity: 25p/kWh + 55p/day standing (estimated)
- Gas: 6p/kWh + 30p/day standing (estimated)
- Monthly use: 350 kWh electricity + 1,000 kWh gas
Estimated monthly cost:
- Electricity: (350 × £0.25) + (30 × £0.55) = £87.50 + £16.50 = £104.00
- Gas: (1,000 × £0.06) + (30 × £0.30) = £60.00 + £9.00 = £69.00
Total estimated monthly: £173.00
Why it matters: higher usage means unit rates dominate, so small rate differences can add up.
Caveat: Many suppliers bill monthly using an estimated annual cost spread across the year (especially on Direct Debit). Your monthly payment may not match usage month-by-month.
Compare deals against the price cap (and decide if switching makes sense)
If you’re on a capped SVT, the cap can be a useful benchmark—but it may not be the best option for your household. Comparing whole-of-market tariffs can help you weigh up:
- Price certainty (fixed vs variable)
- Exit fees (common on fixed deals)
- Standing charges (important for low usage)
- Payment method and meter compatibility (including prepay)
Tip: Don’t compare based on “average bill” headlines alone. Your own usage (kWh) is the most accurate way to estimate costs.
What you’ll need (takes 2 minutes)
- Your postcode (for region-specific rates)
- Your current supplier and tariff type (if you know it)
- Your payment method (Direct Debit / on receipt of bill / prepay)
- Estimated usage in kWh (from recent bills) if available
Get a personalised quote
Share a few details and we’ll show available tariffs you can compare. We’ll use your postcode to pull the right regional rates.
Price cap vs fixed tariffs vs tracker tariffs
This table helps you decide how the price cap compares to other common household tariff types. Exact terms vary by supplier, so always check the tariff information label before switching.
| Tariff type | How prices change | Pros | Watch-outs |
|---|---|---|---|
| SVT (capped) | Unit rates & standing charges limited by Ofgem cap; supplier can change prices when cap updates | No fixed end date; typically no exit fees; good benchmark | Not always cheapest; rates can rise at cap changes; standing charges still apply |
| Fixed tariff | Rates fixed for a set period (e.g. 12–24 months) | Price certainty; easier budgeting; may be lower than SVT depending on market | Possible exit fees; may miss out if prices fall; eligibility/meter terms vary |
| Tracker tariff | Rates move with a reference (e.g. wholesale market index) on a defined schedule | Can benefit quickly when prices fall; transparent link to a benchmark | Less predictable; may rise quickly; check caps/limits within product terms and any exit fees |
Decision checklist: the price cap may suit you if…
- You want flexibility and don’t want exit fees.
- You’re unsure you’ll stay in the property for long (e.g. renting).
- You want to wait while you compare, without being on an uncapped variable tariff.
- You have limited credit history and find fixed deals harder to access (varies by supplier).
A fixed or tracker may suit you if…
- You value budget certainty (fixed) and can commit to the term.
- You’ve found a deal with lower standing charges for your usage profile.
- You can accept some uncertainty to potentially follow market movements (tracker).
- You’ve checked exit fees, payment method rules and meter requirements.
Quick reality check: if your household uses substantially more (or less) than “typical” usage, a tariff that looks good in headlines may not be best for you. Comparing with your own kWh is the safest approach.
Costs, exclusions and common pitfalls
The cap is widely misunderstood. These are the most common areas that trip households up—especially when comparing tariffs.
1) “The cap means my bill is capped”
Your bill depends on usage. The cap only limits the rates on covered tariffs.
2) Standing charges are easy to overlook
If you’re a low user, a tariff with a slightly higher unit rate but lower standing charge might cost less overall (or vice versa).
3) Cap levels vary by region and payment type
Two households can be on the “price cap” but pay different rates due to network costs and payment method differences.
Exclusions & special cases to know
- Fixed tariffs: generally not subject to the cap (though other consumer rules apply).
- Business energy: not covered by this household cap.
- Heating oil/LPG: not covered by the cap.
- Multi-rate tariffs (e.g. Economy 7): price structures can differ; compare using your day/night split if possible.
Common switching pitfalls
- Exit fees: check your current fixed tariff before switching.
- Meter compatibility: some tariffs require a smart meter or don’t support certain prepay setups.
- Estimated Direct Debits: monthly payments may change after a review, even on a fixed tariff.
- Timing: switching takes time; you can usually cancel within cooling-off rules (confirm supplier terms).
If you’re struggling to pay: the price cap isn’t the same as financial support. You may be able to get help via your supplier (payment plans, hardship funds) and independent advice services. See the FAQs below for links.
Energy price cap FAQs
Does the price cap apply to everyone?
It mainly applies to households on standard variable or default tariffs. If you’re on a fixed deal, your prices are set by that contract until it ends (unless you leave early).
Is the cap the same as “typical annual bill” figures in the news?
Not exactly. Headlines often quote an estimated annual cost for a “typical” home, but the cap itself is set as unit rates and standing charges. Your bill depends on your kWh usage.
Can my supplier charge above the price cap?
On covered SVTs/default tariffs, suppliers shouldn’t charge above the capped maximum rates. If you think you’re being overcharged, check your tariff name and rates, then raise it with the supplier and follow their complaints process.
Does the cap include VAT?
Domestic energy is usually charged with VAT at 5%. Whether published cap figures include VAT can vary by presentation. Always check whether rates shown are incl. VAT when comparing deals.
I have a prepayment meter—does the cap still apply?
Yes, there’s a cap level for prepayment customers too, but the rates and standing charges can differ from Direct Debit customers. Your exact charges will still depend on region and meter type.
What happens when my fixed deal ends?
Many customers move onto their supplier’s default tariff (often an SVT), which is typically price-capped. It’s a good moment to compare, because your rates may change.
Will switching affect my supply or smart meter?
Your energy doesn’t go off when you switch supplier. Smart meters generally keep working, but some advanced features can depend on supplier and meter setup. If you’re on prepay or multi-rate tariffs, double-check compatibility.
Where can I get help if I can’t afford my energy bills?
Speak to your supplier as soon as possible (they must offer support options). You can also get independent help from Citizens Advice energy guidance and check eligibility for support on GOV.UK.
Trust, editorial standards and methodology
How we assess price cap information on EnergyPlus
We aim to explain the cap in a way that helps UK households make real decisions, not just understand headlines. For this page, we:
- Focus on the mechanics of the cap (unit rates + standing charges) rather than headline “typical bill” figures.
- Call out the UK-specific variables that change what you pay: region, payment method, meter type, and fuel.
- Use illustrative calculations to show how bills are built from kWh and days.
Assumptions and limitations (important)
- Scenario numbers use example unit rates and standing charges for demonstration only.
- We assume a 30-day month and that charges are applied consistently across the period.
- We don’t include potential bill credits, arrears repayment plans, or supplier-specific discounts/fees.
- For multi-rate meters (e.g. Economy 7), the best comparison depends on your day/night split.
Sources (UK official & independent)
Editorial note: We avoid quoting a single cap “bill” number because it can mislead. Your actual bill depends on usage, meter type, region and tariff terms.
Ready to compare tariffs against the price cap?
Get a personalised view of available deals for your postcode. It’s the quickest way to see whether a fixed, tracker or capped SVT looks best for your usage.
Back to Energy News