What Is the Energy Price Cap?
The energy price cap is the maximum price suppliers can charge per unit of energy for households on standard variable tariffs.
The energy price cap was introduced by the UK government in 2019 and is set by Ofgem, the independent energy regulator [S1]. It limits the maximum price suppliers can charge per kilowatt-hour (kWh) of gas and electricity, along with the maximum daily standing charge [S1].
The cap applies to default or standard variable tariffs — the tariffs customers are placed on when their fixed deal ends or if they have never chosen a tariff [S1]. It does not apply to fixed-rate tariffs, Economy 7 tariffs, or prepayment meter tariffs (which have their own cap).
- Applies to standard variable tariffs (default tariffs)
- Sets a maximum per-unit rate for gas and electricity
- Sets a maximum daily standing charge
- Reviewed by Ofgem every three months
- Does not cap your total annual bill
Current Q4 2026 Rates
For October to December 2026, Ofgem sets electricity at 26.32p/kWh and gas at 7.97p/kWh.
Ofgem announced the Q4 2026 price cap on 27 August 2026, effective from 1 October to 31 December 2026 [S1]. The rates include the unit price and the standing charge, both of which vary by region.
These rates represent the maximum suppliers can charge. Some suppliers may offer tariffs below the cap, though most default tariffs track close to the cap level.
Why Your Bills Vary
Your actual energy cost depends on usage, region, payment method, and meter type.
Even though the cap sets a maximum unit rate, your total bill will differ from other households. The main factors are how much energy you use, where you live, and how you pay [S1].
Standing charges are set by region and vary between energy networks. Payment method also affects the rate — direct debit customers may receive a small discount, while prepayment meter customers have slightly different unit rates [S1].
- Household size and occupancy affect total usage
- Regional standing charges differ across the UK
- Direct debit may offer a small discount
- Prepayment meters have separate rate caps
- Insulation and heating efficiency change how much energy you need
How the Cap Affects Different Tariffs
The cap applies to standard variable tariffs. Fixed-rate deals and prepayment meters are treated differently.
If you are on a fixed-rate tariff, your unit rates are locked in for the term of your deal and are not affected by the cap [S1]. However, when your fix ends, you will typically move to your supplier's standard variable tariff, which is capped.
Prepayment meter customers have their own separate cap, which is typically slightly higher than the standard variable cap [S1].
- Fixed tariffs: rates locked until end of deal
- Standard variable: rates capped by Ofgem
- Prepayment meters: separate cap applies
- Economy 7 / economy tariffs: different structure
How to Calculate Your Bill Under the Cap
Multiply your kWh usage by the unit rate, then add standing charges.
Your bill is calculated by multiplying your energy usage in kilowatt-hours by the unit rate for your tariff. You then add the daily standing charge multiplied by the number of days in the billing period.
For example, a household using 2,900 kWh of electricity per year would pay approximately £763 on electricity alone under Q4 2026 rates, before standing charges [S1]. A typical UK household uses around 12,000 kWh of gas per year [S2].
What the Cap Does Not Cover
The cap does not cover network charges, green levies (directly), or supplier profit margins above the allowed level.
The cap limits what suppliers can charge but does not include all costs on your bill. Network charges (the cost of maintaining the grid), government levies, and supplier operating costs are all factored into the cap calculation [S1].
Ofgem sets an allowance for supplier profit margins within the cap. Suppliers can technically charge less than the cap, but rarely do so for standard variable tariffs.
Frequently asked questions
Does the energy price cap limit my total bill?
No. The price cap limits the maximum unit rate per kWh and the daily standing charge, not your total annual bill. Your actual cost depends on how much energy you use [S1].
How often does Ofgem change the price cap?
Ofgem reviews and resets the price cap every three months — in January, April, July, and October [S1].
Does the cap apply to fixed-rate tariffs?
No. The cap only applies to standard variable (default) tariffs. If you are on a fixed-rate deal, your rates are locked until the deal ends [S1].
What is a standing charge?
A standing charge is a fixed daily charge you pay regardless of how much energy you use. It covers the cost of supplying energy to your home [S1].
Do I pay more on a prepayment meter?
Prepayment meter customers have a separate cap, which is typically slightly higher than the standard variable cap [S1].
Bottom line
The Ofgem energy price cap protects consumers on default tariffs by setting maximum unit rates and standing charges. For Q4 2026, electricity is capped at 26.32p/kWh and gas at 7.97p/kWh [S1]. Your actual bill depends on usage, region, and payment method.
Sources
Sources are shown so readers can check time-sensitive or factual claims directly.
- S1 Ofgem Energy Price Cap — Ofgem
- S2 Typical domestic energy consumption figures — Ofgem
- S3 Energy Saving Trust: Understand your energy bill — Energy Saving Trust