What is the energy price cap?

Last updated: June 4, 2026

In 2019, the government introduced the energy price cap in response to rising energy costs. It sets a limit on the amount energy companies can charge per unit of energy, but it’s worth noting that it’s not a limit on energy bills overall.

The cap is calculated by the regulator, Ofgem, and is updated every three months. This is to make sure it’s in line with inflation, and other changing costs.

From January to March 2026, the price cap rose by 0.2% to £1,758 but dropped by 7% to £1,641 for April to June 2026. Ofgem has announced that the price cap will rise by 13% to £1,862 for July to September 2026.

You might find you can save money on your energy bills by moving onto a fixed tariff. You can check whether you could save money using our energy tool. Or if you’re thinking of switching supplier to save money, our guide to switching explains what’s involved in the process.

Does the energy price cap affect me?

If you’re on a fixed tariff for your energy supply, then you won’t be affected by the price cap. The energy price cap is applied if you’re on a default energy, or standard variable tariff. It sets a maximum price that energy suppliers can charge for every kilowatt hour (kWh) of energy used.  

If you’re on a default tariff, it’s important to note that it doesn’t cap your entire energy bill. Instead, it puts an upper limit on the amount you can be charged per unit of gas or electric. Ofgem estimates that around 26 million people benefit from the energy price cap. 

How is the energy price cap set? 

The energy price cap is based on a typical domestic user with medium energy usage. Ofgem currently estimates that typical means two or three people living in a two- to three-bedroom home, using 2,700 kWh of electricity, and 11,500 kWh of gas each year. 

When the cap is calculated, things like wholesale energy prices, and the cost of the government’s other energy-related schemes, are taken into account. Because average household energy usage has dropped, Ofgem will be reducing its typical domestic use figures from July 1 2026, dropping to 2,500 kWh per annum for electricity and 9,500 kWh per annum for gas.

However, the amounts calculated are just a guide, to show how the cap could affect a typical annual bill. Every household’s bill will be different based on the amount of energy used.

Examples of household energy use

So, how much are my energy bills likely to be?

You’ll always pay for the energy you use, regardless of what the energy price cap is set at.

How much you’ll pay also depends on how energy-efficient your home is, and which appliances you use – and how often you use them.

Take a look at what the average UK energy bill looks like, as well as ways to save.

How do I know how much energy I’m using? 

Your latest energy bill should show your monthly usage and the estimated amount you use per year. You can also find this on a smart meter if you have one. 

Energy usage varies enormously depending on the size of your property and your usage of appliances, as well as the energy-efficiency rating of your home.