Quarterly Cap Archive · Q4 2025
Ofgem Price Cap Q4 2025
October – December 2025
The Ofgem Default Tariff Cap for Q4 2025 — covering 1 October to 31 December 2025 — set a typical dual-fuel household bill of approximately £1,738 per year. Electricity was capped at around 24.67p per kWh and gas at around 6.24p per kWh (national averages; verify exact rates at ofgem.gov.uk). This page covers the Q4 2025 rates, what changed from the previous quarter, and the broader context.
Q4 2025 Cap at a Glance
| Metric | Electricity | Gas |
|---|---|---|
| Unit rate (p/kWh) | ~24.67p | ~6.24p |
| Standing charge (p/day) | ~61p | ~32p |
| Standing charge (£/year) | ~£222 | ~£117 |
All figures are approximate national averages for dual-fuel direct-debit customers. Prepayment meter customers typically face slightly different rates. Regional variation can add or subtract £100–£200/year. Source: Ofgem quarterly cap determination, October 2025.
What Changed from Q3 2025?
Ofgem announced the Q4 2025 cap approximately six to eight weeks before 1 October 2025. The announcement reflected the outcome of Ofgem's quarterly methodology review, which factors in wholesale energy costs over the preceding period, network charges, policy levies and the allowed supplier margin.
| Quarter | Typical bill/yr | Electricity (p/kWh) | Gas (p/kWh) |
|---|---|---|---|
| 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 |
The Q4 2025 cap represented a modest uptick of approximately 1% from Q3 2025, broadly in line with the seasonal pattern: autumn wholesale gas demand typically rises as European countries rebuild storage ahead of winter, placing modest upward pressure on the cap. The increase was far less dramatic than the Q4 2022 surge and reflected a market that had largely stabilised post-crisis.
Q4 2025 in the Long-Term Context
To put Q4 2025 in perspective, here is how the cap compared to key reference points in the post-2021 energy market:
| Reference point | Typical bill | vs Q4 2025 |
|---|---|---|
| Pre-crisis (Q1 2021) | ~£1,138/yr | +53% above |
| Crisis peak (Q4 2022 Ofgem cap) | ~£4,279/yr | 146% below peak |
| EPG-effective rate (Oct 2022 – Jun 2023) | ~£2,500/yr | 44% below EPG |
| Post-crisis low (Q3 2024) | ~£1,568/yr | +11% above low |
| Q4 2025 | ~£1,738/yr | — |
Q4 2025 bills remain notably higher than pre-crisis levels but have stabilised far below the 2022–2023 crisis peaks. The persistent gap above pre-2021 norms reflects structural changes in European gas markets, the ongoing transition away from Russian pipeline gas, and higher policy levies embedded in the cap to fund renewable energy and supplier obligation costs.
What the Q4 2025 Cap Meant for Bills
The cap level set the ceiling for standard variable tariff customers. Here is what Q4 2025 rates meant for households with different usage profiles, at approximate cap rates:
| Household type | Elec (kWh) | Gas (kWh) | Annual bill (approx) |
|---|---|---|---|
| 1-bed flat, electric only | 1,800 | 0 | ~£665 |
| 2-bed flat, dual fuel, low use | 2,000 | 8,000 | ~£1,350 |
| 3-bed semi, typical (Ofgem benchmark) | 2,700 | 11,500 | ~£1,738 |
| 4-bed house, above-average use | 4,500 | 16,000 | ~£2,480 |
| 5-bed house, high use, poor insulation | 6,000 | 22,000 | ~£3,250 |
Estimates based on approximate Q4 2025 unit rates (electricity ~24.67p/kWh, gas ~6.24p/kWh) plus approximate annual standing charges (~£283 dual fuel). Actual bills depend on your regional rates, payment method and metering. Use our energy bill calculator to project your specific cost.
Fixed Tariffs vs the Cap in Q4 2025
By the time the Q4 2025 cap took effect, a number of fixed tariffs were available in the market. In the post-crisis period from late 2023 onward, fixed tariffs gradually returned to the market and by 2025 some deals were priced 5–10% below the prevailing cap.
For a customer on the cap at Q4 2025 rates (~£1,738/year for typical use), a fixed deal priced 5% below the cap would save approximately £87/year. A 10% discount below cap would save approximately £174/year. The case for fixing is stronger when:
- The fixed rate is at or below the current cap
- Wholesale prices are trending upward (cap likely to rise next quarter)
- You want budgetary certainty (especially for winter months)
Customers who switched to a fixed deal ahead of Q2 2025 (which rose to ~£1,849) would have benefited from price certainty during the higher-rate quarter. For the latest deals, use Citizens Advice Energy Compare or visit ofgem.gov.uk.
How the Q4 2025 Cap Was Calculated
Ofgem's quarterly cap methodology builds up a “cost-to-serve” from several components, each reviewed against market data for the preceding period:
| Component | Share of bill (approx) | Description |
|---|---|---|
| Wholesale energy costs | ~35–40% | Gas and electricity forward market prices |
| Network costs | ~25% | Transmission and distribution charges |
| Policy & social levies | ~12% | Renewables, smart meters, Warm Home Discount |
| Operating costs | ~12% | Supplier overheads, billing, metering |
| Allowed EBIT margin | ~2% | Permitted profit to attract supplier investment |
| VAT (reduced rate) | 5% | Energy rated at 5% not 20% |
The wholesale component — around 35–40% of the bill — is the most volatile element and drives most quarter-to-quarter changes. For Q4 2025, wholesale gas prices in the preceding reference period were relatively stable, resulting in only a modest movement from Q3 2025.