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? 

The next energy price cap will mean that energy bills will increase again from 1 July 2026.

What is the energy price cap? 

The price cap is a limit set by Ofgem (the UK’s energy regulator) on the unit price and the standing charge 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 – 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 price will change in line with the cap. 

• If you’re on a fixed tariff, your unit 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. 

How much might this cost you?

Because the cap sets unit prices, not total bills, the exact impact depends on your usage. But here’s what the data tells us:

• A typical household on a standard variable tariff will see costs rise in line with the 13% increase.
• The average UK household are already paying around £1,641 per year under the April–June 2026 cap — the July rise will push this higher to  £1,862 a year. This means an increase of £221 per year.
• People in higher‑use homes (electric heating, older properties, families) will feel the increase more.

When is the next price cap announcement? 

Ofgem updates the price cap every three months: 

The next price changes take effect on the 1st July 2026.

What you can do now (practical actions)

1. Check your tariff

• Energy experts are encouraging people to consider switching to a fixed tariff to protect against further rises.
• Fixing can give peace of mind and shield you from volatility.

2. Submit a meter reading

• Ensures you’re billed accurately at the old rate before the increase kicks in.

3. Reduce avoidable energy use

Small changes can offset part of the rise:

• Shorter showers
• Lowering flow temperature on boilers
• Turning appliances fully off

4. Ask for support if you’re struggling 

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. 

Phone support: 0800 772 3617

Email: healthyhomes@ecoeadvice.org.uk

Come and see us at one of our drop-in sessions near you.

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