Energy Guide · Updated June 2026
Ofgem Price Cap Explained
The Ofgem Default Tariff Cap controls the maximum unit rates and standing charges that UK energy suppliers can apply to standard variable tariff customers. For Q2 2026 (April–June 2026), the cap equates to a typical household bill of around £1,849/year. Here is everything you need to know about how the cap works, how it has changed since the energy crisis, and how to keep your bills as low as possible.
How the Ofgem Price Cap Works
Introduced in January 2019 and significantly reformed after the 2022 wholesale gas crisis, the Ofgem Default Tariff Cap consists of two components that suppliers may not exceed:
- Unit rate (pence per kWh) — the maximum you can be charged per unit of electricity or gas consumed
- Standing charge (pence per day) — the daily fixed connection fee, regardless of usage
The cap is not a cap on your total bill. This is one of the most common misunderstandings about UK energy. The widely reported “typical household” figure assumes Ofgem's standard consumption profile: 2,700 kWh of electricity and 11,500 kWh of gas per year, paying by direct debit. If you use more energy than this, your bill will exceed the headline figure. If you use less, you will pay less.
The cap applies to around 28 million UK households on standard variable tariffs (SVTs) — the default tariff that most suppliers revert customers to when a fixed deal expires.
It does not apply to fixed-rate tariffs, time-of-use tariffs (such as Octopus Agile), business customers, or households in Northern Ireland (which has a separate regulator, the Utility Regulator NI).
Current Rates — Q2 2026 (April–June 2026)
Typical household: ~£1,849/year
Based on 2,700 kWh electricity + 11,500 kWh gas, direct debit. Updates quarterly.
| Fuel | Unit rate (p/kWh) | Standing charge (p/day) |
|---|---|---|
| Electricity | ~24.67p | ~61p |
| Gas | ~6.24p | ~32p |
These are approximate national averages for direct-debit customers. Actual rates vary across 14 regional distribution zones in Great Britain — the difference between cheapest and most expensive region can be £100–£200/year. Always verify exact rates at ofgem.gov.uk or your supplier's website.
Cap History: From the 2022 Energy Crisis to Today
The energy crisis of 2021–2022 — driven primarily by the surge in global wholesale gas prices following the Russian invasion of Ukraine — pushed the cap to levels that would have been unimaginable previously. Here is the key context:
- Pre-crisis baseline: In early 2021 the cap stood at around £1,138/year. This was broadly in line with where energy bills had been for most of the 2010s.
- Q4 2022 peak — £4,279/year:The cap reached its highest-ever level. The Government's Energy Price Guarantee (EPG) effectively overrode the cap from October 2022 to June 2023, meaning most households actually paid for a typical bill of around £2,500 rather than the Ofgem cap figure.
- 2023 gradual normalisation: As wholesale gas markets calmed and European gas storage filled, the cap fell sharply through 2023, dropping from £3,280 in Q2 2023 to £1,834 by Q4 2023.
- Mid-2024 near-normalisation: The cap fell to £1,568 in Q3 2024 — the lowest since before the crisis. Bills were close to, though still above, 2019 pre-cap-era levels in real terms.
- 2025–2026 modest fluctuations: The cap has moved within a £1,568–£1,849 range as wholesale markets remain sensitive to geopolitical risk, LNG supply and seasonal demand.
The lesson from this period is that wholesale energy costs are volatile and the cap provides a floor of protection — but not an absolute one. Fixed tariffs, when priced below the cap, offer predictability.
Quarterly Timeline: Q1 2023 to Q2 2026
All figures are approximate. Unit rates are national averages for direct-debit customers. Verify exact historical and current rates at ofgem.gov.uk.
| Period | Typical bill/yr | Electricity (p/kWh) | Gas (p/kWh) |
|---|---|---|---|
| Q1 2023 (Jan–Mar) | £3,000 | ~34p | ~10.3p |
| Q2 2023 (Apr–Jun) | £3,280 | ~30p | ~8.0p |
| Q3 2023 (Jul–Sep) | £2,074 | ~30p | ~7.5p |
| Q4 2023 (Oct–Dec) | £1,834 | ~27p | ~6.9p |
| Q1 2024 (Jan–Mar) | £1,928 | ~29p | ~7.4p |
| Q2 2024 (Apr–Jun) | £1,690 | ~24.5p | ~6.0p |
| Q3 2024 (Jul–Sep) | £1,568 | ~22.4p | ~5.5p |
| Q4 2024 (Oct–Dec) | £1,717 | ~24.5p | ~6.24p |
| Q1 2025 (Jan–Mar) | £1,738 | ~24.5p | ~6.0p |
| Q2 2025 (Apr–Jun) | £1,849 | ~27.03p | ~6.99p |
| Q3 2025 (Jul–Sep) | ~£1,720 | ~24.5p | ~6.0p |
| Q4 2025 (Oct–Dec) | ~£1,738 | ~24.67p | ~6.24p |
| Q1 2026 (Jan–Mar) | ~£1,736 | ~24.5p | ~6.2p |
| Q2 2026 (Apr–Jun) | ~£1,849 | ~24.67p | ~6.24p |
Q4 2022 crisis peak (not shown): ~£4,279/year. Q3 2022: ~£3,549. Q2 2022: ~£1,971. Sources: Ofgem. Figures prior to 2024 are approximate, rounded from published cap determinations.
How to Reduce Your Energy Bill
Even with the cap, typical household bills remain well above the pre-2021 baseline. There are several practical ways to reduce what you pay:
1. Switch to a cheaper fixed tariff
When fixed deals are priced below the current cap, switching can save £100–£250/year for typical households. Use a price comparison tool to check current deals — see switching section below.
2. Reduce consumption with no-cost behavioural changes
Turn your thermostat down 1°C (saves ~10% on heating bills), wash clothes at 30°C, line-dry instead of tumble drying, switch off standby electronics, and only run the dishwasher on full loads. Combined, these can save £150–£350/year with no capital outlay.
3. Improve insulation
Loft insulation top-up (£350–£500 to install) saves around £350/year — payback under 18 months. Cavity wall insulation (£500–£800) saves £290–£400/year. Both may be free for eligible households under the ECO4 scheme.
4. Check eligibility for grants and discounts
The Warm Home Discount (£150 rebate) is automatic for Pension Credit recipients and data-matched for many households on means-tested benefits. ECO4 funds free insulation and boiler replacements for low-income households. The Boiler Upgrade Scheme offers £7,500 toward a heat pump.
5. Get a smart meter and consider time-of-use tariffs
Smart meters unlock real-time usage data and access to time-of-use tariffs. Households with EVs or heat pumps can save 20–40% on electricity versus the flat-rate cap by charging off-peak.
For a detailed breakdown of every reduction method, see our guide: How to Reduce UK Energy Bills.
Switching Energy Suppliers
Switching your energy supplier or tariff is usually the quickest way to save money — particularly when fixed deals are priced below the current cap. The switching process takes around three weeks and your supply is never interrupted.
- Citizens Advice Energy Compare — the regulator-recommended, non-commercial comparison service. No commission bias. Start at citizensadvice.org.uk.
- Uswitch, Compare The Market, MoneySuperMarket— commercial comparison sites that earn commission from suppliers. Useful but check the unit rate and standing charge yourself rather than relying on their “recommended” ranking.
- Money Saving Expert Cheap Energy Club — volunteer-run, cross-checks comparison results and flags the cheapest deals. Useful independent check.
Before switching, check: the annual unit rate; the standing charge (often where suppliers cut corners); exit fees (typically £50–£75 per fuel if you switch out of a fix early); and the contract length. For current official cap guidance visit ofgem.gov.uk.
Note: fixed tariffs were largely unavailable 2022–2023 due to wholesale price volatility. They returned in late 2023 and in 2024–2026 some deals have been priced 5–15% below the variable cap.
Quarterly Cap Pages
For detailed breakdowns of specific quarterly caps: