Energy Price Cap 2026: Latest Ofgem Rates & History

Set by Ofgem, it limits the unit rates and standing charges suppliers can charge customers on standard variable tariffs. What it does not do is cap your total bill. If your home uses more energy, your bill can still wander well past the headline figure, entirely legally and with all the charm of a printer ink subscription.

From 1 July to 30 September 2026, the price cap for a typical dual-fuel household paying by Direct Debit will rise to £1,862 per year. That is up from £1,641 for April to June 2026, an increase of around 13%, or £221 a year for a typical household.

The biggest jump is gas. The average gas unit rate rises from 5.74p per kWh to 7.33p per kWh, while electricity increases from 24.67p per kWh to 26.11p per kWh. So, if your boiler was already giving your bank account side-eye, it now has backup.

Current energy price cap rates

The price cap changes every three months. Here are the latest Ofgem average rates for households paying by Direct Debit.

These are average figures. Your actual rates vary by region, payment method, meter type and supplier. All prices include VAT.

PS Are you wondering what impact the new price cap will have on the daily running costs of your household appliances? See the full breakdown in pence per hour here. 

Is the energy price cap actually a cap on your bill?

No, and this is where the name does a lot of unhelpful heavy lifting.

The cap limits the rates your supplier can charge. It does not limit how much energy your home can use, and therefore it does not limit what your final bill can be.

A small, well-insulated flat using very little gas and electricity may pay less than the headline cap. A draughty four-bed house with the heating on all day can pay much more. Both can still be “under the cap”, because the cap is applied to the unit rates and standing charges, not the final bill.

Ofgem caps the price of each slice of toast, not how much toast your house eats.

Who does the energy price cap apply to?

The cap mainly applies to households on default or standard variable tariffs. That usually includes customers paying by Direct Debit, standard credit, prepayment meter, or using Economy 7 on a default tariff.

If you are on a fixed tariff, the price cap does not normally affect you until your deal ends. Your rates are set by your contract, which is either comforting or horrifying depending on when you fixed.

There is also no domestic-style energy price cap for most business energy contracts.

Energy price cap by payment method

The headline figure of £1,862 is based on a typical household paying by monthly Direct Debit.

From July 2026, typical annual costs vary by payment type. Direct Debit customers sit at £1,862, prepayment customers at around £1,812, and standard credit customers at around £2,005.

Standard credit is usually more expensive because suppliers face higher billing and collection costs. Which is a polite industry way of saying: “we charge more when chasing payment is more annoying.”

When does the price cap change again?

Ofgem reviews the energy price cap every three months. The July 2026 cap was announced on 27 May 2026 and applies from 1 July to 30 September 2026.

The next announcement is expected on 26 August 2026, covering the period from 1 October to 31 December 2026. After that, the following announcement is expected on 25 November 2026, covering 1 January to 31 March 2027.

Why is the energy price cap rising?

Energy prices change because the costs that make up the cap change over time.

These include wholesale gas and electricity prices, network costs, supplier operating costs, policy costs, VAT, payment method costs and allowances for bad debt and supplier risk.

For the July 2026 cap, the rise is mainly being driven by higher wholesale energy costs, particularly gas.

This is the awkward truth about the price cap: it protects customers from excessive default tariff pricing, but it does not magically detach UK bills from global energy markets.

Annoying? Yes.

Surprising? Sadly, no.

How is the energy price cap calculated?

Ofgem calculates the price cap using the costs suppliers face when providing gas and electricity to households. Every three months, it reviews how much suppliers can charge per unit of energy and for the daily standing charge on default tariffs.

The headline annual cap is based on typical domestic consumption. In 2026, this is commonly based on average annual use of around 2,700 kWh of electricity and 11,500 kWh of gas.

That is why two households on the same capped tariff can still have very different bills. A small flat and a draughty four-bed house are not going to land in the same place, unless physics has taken the day off.

History of the Energy Price Cap

First established in January 2019, the energy price cap was introduced to protect households on default tariffs, also known as standard variable tariffs.

Since then, it has been on quite the ride…

The cap started at £1,137 for a typical dual-fuel household in January 2019. By January 2023, during the height of the energy crisis, the headline cap had climbed to £4,279. That figure was so high the government’s Energy Price Guarantee stepped in to limit what typical households actually paid.

Since then, prices have fallen from the peak, but they remain far above where they were when the cap was first introduced. From July 2026, the cap will sit at £1,862, around 64% higher than the original January 2019 cap.

In other words, the cap has done a lot of moving, mostly in the direction nobody particularly enjoyed.

Below is an infographic showing the history of the energy price cap and how it has changed over time, including both the annual figure and the average monthly cost.

Image released under Creative Commons. If used, please attribute it by linking to: heatable.co.uk

Why was the energy price cap introduced?

The energy price cap was introduced to protect households on default tariffs from being overcharged.

Before the cap, customers who did not regularly switch supplier or tariff could end up paying much more than customers on cheaper fixed deals.

The cap was designed to stop suppliers from charging excessive prices to disengaged customers, while still allowing them to recover reasonable costs.

That last part matters. The price cap is not designed to make energy cheap. It is designed to stop default tariffs becoming a complete free-for-all.

Is the energy price cap working?

Sort of. Which is annoying, but true.

The price cap does offer protection. Without it, households on default tariffs could be exposed to worse pricing, especially during periods of market stress.

But the cap also follows the market. When wholesale prices rise, the cap usually rises too. That means it does not fully protect households from global energy shocks.

So the cap is best understood as a backstop, not a bargain.

It can stop the worst supplier behaviour, but it cannot make gas cheap, fix the UK’s housing stock, or insulate your loft by sheer regulatory vibes.

Should you switch energy supplier before the next price cap rise?

Possibly.

If you are on a standard variable tariff, it is worth comparing your current tariff against fixed deals before the July 2026 cap begins.

A fixed tariff may be worth considering if the unit rates are lower than the July cap, the standing charges are not unusually high, there are no painful exit fees, and you want price certainty.

However, do not switch just because the headline annual estimate looks cheaper.

Check the electricity unit rate, gas unit rate, standing charges, exit fees, tariff length and whether the deal matches your actual usage. MoneySavingExpert says July’s 13% cap rise means many households should check whether they can avoid the increase by switching or fixing, though the right answer depends on the exact tariff available to you.

Should you switch from gas to electric heating?

Not automatically.

This is where the internet can get a bit overexcited.

Yes, gas prices are rising sharply from July 2026. But electricity is still much more expensive per kWh than gas, so switching from a gas boiler to basic direct electric heating is not usually a guaranteed money-saver.

A move away from gas can make more sense if you are considering a properly designed heat pump system, solar panels and battery storage, off-peak electricity tariffs, an EV tariff with cheap overnight rates, or a highly insulated home with low heat demand.

For most homes, improving insulation, heating controls and boiler efficiency will be the better first step.

What can you do to keep energy bills low?

Make the most of your energy tariff

If your home uses electric heating, an electric boiler, an immersion heater, storage heaters or other high-use electrical appliances, check which tariff you are on.

If you have Economy 7 or another multi-rate tariff, electricity is cheaper during off-peak hours. Shifting usage into those cheaper periods can reduce costs.

This can be especially useful if you use an immersion heater, as you can time it to heat water during off-peak periods and keep that water warm with a well-insulated tank.

Compare energy quotes

Fixed deals have returned to the market for many households, so it is worth checking whether moving away from your current tariff could save money.

The price cap only applies to default tariffs, so some fixed tariffs may be cheaper depending on your usage, region and supplier terms.

Just do the boring bit properly: compare unit rates and standing charges, not just the headline “you could save” number.

Improve your home’s energy efficiency

Reducing heat loss is usually one of the most reliable ways to cut energy bills over the long term.

Loft insulation, cavity wall insulation, draught-proofing, better heating controls, thermostatic radiator valves, smart thermostats and hot water cylinder insulation can all help reduce wasted energy.

None of this is glamorous. But neither is paying to heat the neighbour’s pigeons through an uninsulated roof.

Consider upgrading an older boiler or switching to low-carbon heating

If your boiler is old and inefficient, replacing it with a new condensing model may cut running costs, though savings vary depending on your home and current system.

For households looking at low-carbon alternatives, the Boiler Upgrade Scheme currently offers grants of up to £7,500 in England and Wales towards eligible heat pumps or, in some cases, biomass boilers.

Consider low-carbon heating

For suitable homes, a heat pump can be a strong long-term option, especially when the system is properly designed and the property is well insulated.

The Boiler Upgrade Scheme currently offers grants of up to £7,500 in England and Wales towards eligible heat pumps or, in some cases, biomass boilers.

This is not right for every home, but if you are already planning a major heating upgrade, it is worth looking at properly rather than dismissing it because Dave on Facebook said his mate’s cousin was cold once.

Fuel poverty in the UK

The latest official figures published in March 2026 show that in England, an estimated 2.36 million households were in fuel poverty in 2025 under the Low Income Low Energy Efficiency measure.

That represents 9.4% of households, down from 2.47 million in 2024. These figures apply to England only, not the whole UK.

Government energy support and rebates

During the energy crisis, the government introduced several support schemes to help households with energy bills.

These included the Energy Bills Support Scheme, which gave households £400 off energy bills over winter 2022 to 2023; the Energy Price Guarantee, which temporarily limited typical household bills; alternative fuel payments for some households not using mains gas; and business energy support schemes, which have now ended.

Current support is more targeted and may include schemes such as Warm Home Discount, Winter Fuel Payment, local authority support, supplier hardship funds or energy-efficiency grants.

If you are struggling to pay your bill, contact your supplier as early as possible. Suppliers are required to work with customers in difficulty, and ignoring the bill is rarely the cheapest strategy.

What happens if your energy supplier goes bust?

If your energy supplier goes bust, your gas and electricity supply will not be cut off.

Ofgem will move affected customers to a new supplier through its Supplier of Last Resort process.

You should usually wait until Ofgem appoints the new supplier before trying to switch. Your new supplier will contact you, and domestic customer credit balances are normally protected.

In other words, do not panic-switch while the admin wheels are still turning.