What is the energy price cap?

The energy price cap limits the price of a single unit of energy for customers paying for variable energy tariffs.

Ofgem's price cap has been in effect since 1 July 2023. It took over from the government's Energy Price Guarantee (EPG) when it became the cheaper of the two.

Under the price cap, typical energy bills are around £1,690 per year (£141 per month) for the months from April to June 2024.

The price cap is not a limit on your total bill. It restricts the price per unit (or kWh) that energy companies can charge.

Your total bill depends on how much electricity and gas you use.

Are you on the energy price cap?

The price cap was introduced by Ofgem in 2019 to ensure fair prices for customers who don’t actively switch energy provider to make the most of deals.

It only affects variable tariffs - also known as standard, default or out-of-contract tariffs.

Previously, most people would have been on fixed energy tariffs and therefore not affected by changes to the cap. But because competitive fixed deals all but vanished from the market in autumn 2021, most households (around 29 million) are currently paying variable rates for their energy. 

Use our free, independent energy comparison service to compare gas and electricity prices and find the best provider for you. 

How much is the current energy price cap?

The price cap is not a cap on your payments, but a limit on the amount that suppliers can charge for each unit of energy you use and your daily standing charge. 

Between 1 April and 30 June 2024 the average unit rates in England, Scotland and Wales are as follows.

For direct debit customers, the average unit rates will work out around:

• Electricity: 24.5p per kWh with a standing charge of 60.1p per day
• Gas: 6.04p per kWh with a standing charge of 31.43p per day 

If you have a prepayment meter, you'll pay the same standing charge as direct debit customers, but lower rates per kilowatt hour:

• Electricity: 23.72p per kWh with a standing charge of 60.1p per day
• Gas:  5.82per kWh with a standing charge of 31.43p per day 

If you pay when you receive your bills, your rates will be the most expensive. They'll work out around:

• Electricity: 25.79p per kWh with a standing charge of 65.88p per day
• Gas:  6.36per kWh with a standing charge of 35.21p per day 

These are the average prices across England, Scotland and Wales. Your exact rates will depend on where you live.

How providers split the unit rate and standing charge is up to them, and dependent on the region you live in, but the total cost cannot be higher than the cap.

The widely reported figure for the price cap (e.g. £1,690 for April to June 2024) is an illustration based on what it might cost over a year for a household using a medium amount of energy, defined as 11,500kWh of gas and 2,700kWh of electricity per year. This means your bills might look very different depending on your circumstances.

We've run the electricity price through our lab energy use data to show you how much your household appliances cost to run.

What will energy prices be in summer 2024?

The price cap is adjusted every three months. 

It's expected to fall by around 8% in July and increase again in the autumn. That's according to industry experts Cornwall Insight.

Find out more about: the price cap from April 2024.

What was the Energy Price Guarantee?

The EPG capped the average gas and electricity unit rates. It superseded Ofgem's energy price cap for everyone between October 2022 and June 2023 when energy prices were especially high. 

It ends in April 2024. Recently it has only affected what prepayment customers pay, by removing the 'prepayment premium'.

The EPG sets the unit rates for gas and electricity. Standing charges are set by Ofgem. 

Find out more about: different types of energy tariff

What's the difference between the EPG and the price cap?

The EPG was a government-led scheme. It capped average energy unit rates beyond the rates of the price cap. 

It only applied to unit rates (and not standing charges). The unit rates you paid under the EPG differed slightly based on where you live and the sort of tariff you pay for. 

The price cap is set by energy regulator Ofgem. It effectively determines both the unit rates and standing (or daily) charges you pay for your gas and electricity. It's recalculated every three months. 

Your bills were determined by whichever is lower.

When the EPG was lower than the price cap, the government paid the difference to your energy company.

Additional cost-of-living payments for vulnerable households

Targeted financial support is available for pensioners, those on low incomes and those with disabilities.

£900 for those receiving means-tested benefits

Some 8 million of the lowest income households in the UK should have received their final cost of living payment between 6 and 22 February 2024.

This £299 payment was the last of five payments for those on certain means-tested benefits. This includes Universal Credit, tax credits, pension credit and other means-tested benefits. 

The money was paid directly into people’s accounts from the Department for Work and Pensions (DWP)

You should have received the payments automatically if you were eligible.

If you think you were eligible for the payment and didn't receive it in your bank, building society or credit union account, you can report it to HMRC here.

Find out more about what help is available if you're struggling to pay your energy bill

Other ways to reduce energy bills

Any cutbacks you can make to your energy usage could help soften the blow of increasing bills. Some ways to do this are:

• Lowering your combi boiler's flow temperature – This small tweak can lower your gas bills while still keeping your home warm. Find out how to adjust your boiler flow temperature.
• Turning down thermostatic radiator valves in unoccupied rooms – Keep the heat you generate in the rooms that need it so that your central heating isn't on for as long. 
• Heat the person, not the home – This isn't possible for all households, but if you are able to, it's usually cheaper to heat yourself rather than the whole house. Look for electric blankets and heaters for quick bursts. 
• Only use white goods efficiently – Try to only put your washing machine and dishwasher on when they're full and use eco settings where possible. Washing at 30^oC or below is usually more energy efficient than hot washes.
• Add loft insulation and draft proofing – Improving your loft insulation is a good way to make your home feel cosier in the winter months and bring down your bills. Draft proofing can be a cheap way to get started.

When it comes to your payments, you might be able to make small savings by opting for paperless bills and managing your account online (as some suppliers charge extra for paper bills). Getting a smart meter installed, or sending regular meter readings, will ensure your bills are accurate. 

Find out more about ways to save on your energy bills