Price cap explainer

Understanding the UK Energy Price Cap: What It Is and What It Means for You 

Energy bills have been a rollercoaster over the past few years, and it’s completely normal to feel confused about what’s going on. One term you’ll hear again and again is the “price cap.” But what actually is it, and how does it affect your household? 

What is the energy price cap? 

The price cap is a limit set by Ofgem (the UK’s energy regulator) on the unit price energy companies can charge you for gas and electricity if you’re on a standard variable tariff. 

A few key things to know: 

• It doesn’t cap your total bill — just the price per unit of energy you use. 

• If you use more energy, your bill will still be higher. 

• It’s reviewed every three months, so it can go up or down depending on what’s happening in the wider world. 

Think of it like a speed limit: suppliers can charge less, but they can’t charge more than the cap. 

Why does the price cap change so often? 

In the last few years, global events have had a huge impact on the cost of energy. In plain English: 

• International conflicts have disrupted gas supplies. 

• Global demand has been up and down like a yo‑yo. 

• Wholesale energy prices (what suppliers pay before selling to us) have been unpredictable. 

When wholesale prices rise, the cap tends to rise. When they fall, the cap usually comes down. The cap is meant to protect households from sudden spikes, but it can’t shield us from everything. 

How does this affect me? 

This depends on your tariff and how much energy you use, but here’s the simple version: 

• If you’re on a standard variable tariff, your unit rates will change in line with the cap. 

• If you’re on a fixed tariff, your price won’t change until your fix ends. 

• If you’re using prepayment meters, the cap applies to you too — and sometimes works slightly differently, but still aims to keep costs fair. 

The cap going down usually means bills ease a little. The cap going up means bills rise. But remember: your total bill still depends on how much energy you use. 

When is the next price cap announcement? 

Ofgem updates the price cap every three months: 

• 1 January 

• 1 April 

• 1 July 

• 1 October 

The new rates are usually announced a few weeks beforehand, so you’ll often hear about changes before they kick in. 

Do I need to do anything? 

Most people don’t need to take any action — but it’s always worth getting personalised advice if you’re unsure. 

You might want to: 

• Check whether you’re on a standard variable or fixed tariff 

• Look at your recent energy use 

• Make sure your meter readings are up to date 

• Ask for help if you’re struggling with bills or topping up 

And that’s where we come in. 

Need help understanding your bill or reducing your energy use? Come and see us at one of our drop-in sessions near you.  

Energy bills can feel overwhelming, but you don’t have to figure it out alone. Our team is here to help you understand what the price cap means for your household, what support you might be entitled to, and we give advice and practical support to help reduce energy use and keep your bills down. 

Pop into one of our drop‑in sessions, we hold them regularly all over Torbay, Teignbridge, Mid Devon, East Devon and Exeter. Our friendly team can give lots of help and advice and can also set you up with a home visit* from one of our home energy experts.  

Drop-in sessions near you

*eligibility criteria apply for home visits