The Ofgem Energy Price Cap Explained for 2026/27
What the Ofgem price cap actually limits, how it's set quarterly, and what the Q2 2026 typical dual-fuel figure means for your bill.
What the Cap Actually Limits
The Ofgem price cap sets the maximum unit rates (pence per kWh for electricity and gas) and standing charges (a fixed daily amount) that suppliers can charge customers on a default, standard variable tariff. It's important to understand this is a cap on price per unit, not a cap on your total bill — a household using more energy still pays more overall under the cap than a household using less, because both are paying the same capped rate per unit, just at different volumes of consumption.
The Quarterly Review Cycle
| Quarter | Period covered |
|---|---|
| Q1 | January to March |
| Q2 | April to June |
| Q3 | July to September |
| Q4 | October to December |
Ofgem reviews and resets the cap level every quarter, based primarily on wholesale energy costs (which suppliers must buy in advance to serve customers) along with network costs, policy costs and other components that feed into the overall price. Because wholesale prices can move significantly between reviews, the cap level — and therefore the widely reported "typical annual bill" figure — can rise or fall noticeably from one quarter to the next, which is why bill estimates from an earlier quarter can become out of date fairly quickly.
Default Tariffs vs Fixed Deals
The price cap specifically applies to default (standard variable) tariffs — the tariff you're automatically moved onto if a fixed-term deal ends and you don't actively choose a new one, or if you've never switched away from your supplier's standard offering. Suppliers also offer fixed-term tariffs, which lock in a rate for a set period and aren't directly bound by the cap in the same mechanical way, though competitive pressure in the market generally keeps fixed deals within a broadly similar range to the cap level, sometimes below it when suppliers are competing for new customers.
Why the "Typical Bill" Figure Isn't Your Bill
The headline typical annual bill figure widely reported alongside each price cap update is calculated for an assumed average household's gas and electricity consumption, paying by direct debit. Actual bills vary from this figure based on your own household's usage (larger or smaller than the assumed average), your region (network costs vary somewhat by region), and your payment method (direct debit customers typically pay less per unit than those paying on receipt of bill or via a prepayment meter). The underlying capped unit rates are the reference point — your actual bill is those rates applied to your specific consumption.
Making Sense of Your Own Bill Under the Cap
- Check whether you're on a default tariff (subject to the cap) or a fixed-term deal
- Compare your own household's usage against the assumed "typical" consumption used in headline figures
- Check your region and payment method, both of which affect your actual unit rates within the cap
- Review your bill each quarter when the cap updates, since the level can shift meaningfully
Use the energy bill and electricity cost calculators below to estimate your own bill under the current price cap based on your actual usage.
Frequently asked questions
Does the Ofgem price cap limit my total bill, or just the unit rate?
The price cap limits the unit rates and standing charges suppliers can charge on a default (standard variable) tariff, not the total bill you pay — a household that uses more energy pays a higher total bill even under the cap, because the cap controls the price per unit, not the overall amount spent, which still depends on your actual consumption.
How often does the price cap change?
Ofgem reviews and updates the price cap quarterly, reflecting changes in wholesale energy costs and other factors feeding into supplier costs, meaning the cap level for the April to June quarter can differ meaningfully from the following quarter depending on how wholesale prices have moved.
Does the price cap apply to every energy tariff?
The price cap applies specifically to default (standard variable) tariffs, which is what customers are moved onto if they don't actively choose a fixed-term deal. Fixed tariffs, which some suppliers offer below or around the cap level, aren't directly capped in the same way, though competitive pressure generally keeps them in a similar range.
Is the 'typical' price cap figure what I'll actually pay?
Not necessarily — the widely quoted 'typical annual bill' figure is based on a assumed average household's consumption paying by direct debit, so your actual bill will differ if your usage, payment method or region differs from that assumed average, even though the underlying unit rates and standing charges are the same cap level.
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