Energy price cap explained: what is the energy price cap?

REMEMBER: The price cap is based on the maximum a supplier can charge if you are an ‘average user’, so if you use more, you pay more...

What's the latest price cap and what does it mean for me?

• The average annual energy bill currently stands at £1,755 for the average household that's on a dual-fuel standard variable tariff, and that pays by direct debit due to the energy price cap

• This applies between 1 October and 31 December 2025

• This is up 2% (around £35) from £1,720, which applied between 1 July and 30 September 2025

Changes in the market mean we’re now able to offer better energy deals through our switching service, which could save you money or let you sign up to a fixed-rate energy tariff to insulate you from any further price rises.

Energy price cap unit rates between 1 October and 31 December 2025

Under the terms of the current energy price cap, you pay a set rate for each unit of energy you use. Here's how the current unit rates look:

Figures are rounded to two decimal places and based on the England, Scotland and Wales average for people who pay by Direct Debit. These include 5% VAT.

Ashton Berkhauer
Home & Utilities Expert

Our expert says

To help manage the rising cost of energy we recommend looking into fixed-rate tariffs. By locking in a fixed rate, you can shield yourself from future price hikes and have a clear idea of what your energy costs will be.

In these uncertain times, fixing your rate can offer peace of mind and make budgeting easier. We would advise anyone looking to lower their energy costs to secure one of our money-saving tariffs or another fixed option before they disappear.

Energy price cap history - Jan 2019 to present

When will new price caps be announced?

Why was the cap introduced?

The price cap was intended as a safety net for customers who do not regularly switch and who are on standard or default tariffs – typically a supplier’s most costly tariff. 

The aim of the cap was to make sure customers who didn’t switch still got a ‘fair price’.

Despite this, variable tariffs set at the price cap level were usually some of the most expensive deals.

What if my energy supplier goes bust?

If your provider does collapse, there’s no need to panic, as Ofgem steps in to protect customers.  

The regulator carries out a process of choosing a new supplier to ‘rescue’ the business.

You can be reassured that your energy supply will continue as normal, and any credit balances will be protected. 

What if I’m struggling to pay my bills?

Crucially, if you’re struggling to afford heating costs, you should contact your energy supplier as soon as possible.

Some providers also allow you to reduce your outgoings by taking advantage of the Demand Flexibility Service.

This offers cheaper energy if you reduce your usage at designated times of day, during certain months. You can check if your supplier is signed up to the Demand Flexibility Service, or is planning to participate in future, by giving them a ring.

You may be eligible for extra help too. This will depend on your circumstances but could include:

• Debt repayment plans

• Payment breaks

• Emergency credit for those on prepayment meters

• Schemes such as the Winter Fuel Payment or the £140 Warm Home Discount

Read more here: Where to turn for help with your energy bills

Take steps to reduce your bills

Now is also a good time to take steps around your home to be more energy efficient ahead of increased energy usage during the winter months.

Simple things you can do include switching gadgets off standby, making the move to energy-saving light bulbs, and only boiling the amount of water you need in the kettle.

Need some more pointers? Read our simple tips for being more energy efficient.

Is there an energy price cap for business energy?

No, the energy price cap only affects domestic energy tariffs.

Instead, the government introduced the Energy Bills Discount Scheme, or 'EBDS'. This offered discounted energy rates on eligible non-domestic energy contracts for 12 months from 1 April 2023 to 31 March 2024.

No new schemes have been announced, so comparing and switching your business energy supplier remains the primary way you can take steps to reduce your energy bills.

Sources and methodology

All price cap data and volume of UK households on a standard tariff provided by Ofgem.