Energy price cap costs and predictions

What is the current energy price cap?

On 27 May 2026, Ofgem announced that the new energy price cap will rise by 13% to £1,862 per year for an average household paying for gas and electricity by Direct Debit. This is a 13% increase (approximately £221) compared to April-June 2026.

While the current energy price cap figure is a useful benchmark, it’s important to remember that the cap limits the unit rate and standing charge your supplier can charge. It’s not representative of your total bill. If you use more energy, you will pay more, and the cap varies based on how you pay.

The table below shows the total annual price cap for a typical dual-fuel household across the three main payment types for Q3 2026 (1 July – 30 September):

Figures are based on Ofgem’s 2026 Typical Domestic Consumption Values (TDCVs) at medium consumption. These are 11,500 kWh for gas and 2,700 kWh for electricity.

What are the current energy price cap unit rates and standing charges?

Your energy bill is made up of two main parts:

Unit rate: This is what you pay for the gas and electricity you actually use, measured in kilowatt-hours (kWh).

Standing charge: This is a fixed daily cost for being connected to the energy network. You pay it even if you don’t use any energy that day.

Ofgem sets a maximum limit for both of these charges under the price cap. Suppliers on standard variable tariffs can’t charge more than these limits.

The table below shows the national average rates (including 5% VAT) for customers on a standard variable tariff, calculated by Ofgem. Your supplier cannot charge you more than this for these specific components.

These figures represent the national average, as exact costs may vary based on your location.

Read our handy guides to find out what are energy standing charges, and about understanding kWh.

Future energy price cap predictions

Staying updated on upcoming changes is key to helping you effectively budget for the future.

While the price cap is updated quarterly by Ofgem, analysts at Cornwall Insight (a trusted provider of energy prices forecast data) provide regular forecasting updates on where they expect the cap to go next.

Here’s a summary of the latest price cap predictions for 2026, but it’s important to remember that these figures are for guidance only and aren’t guaranteed.

Price cap prediction figures are estimates and use national averages; however, they are likely to change amid ongoing global events.

How is the energy price cap calculated?

Ofgem reviews the cap four times a year – in January, April, July and October.

The biggest factor behind changes to the cap is wholesale energy prices. That’s the price suppliers pay for gas and electricity before it reaches your home.

But a few other things are included too:

• Operating costs - the cost of running and billing energy accounts

• Networking costs - maintaining the pipes and wires that deliver energy

• Policy costs - government environmental and green energy schemes

• VAT - currently 5%

• Earnings - supplier profit margins

• Extra allowances - for unexpected costs in the market

Past energy price cap rates

Here’s an overview of the previous energy price caps:

What do I need to do?

If the energy price cap changes, most of the heavy lifting happens behind the scenes. But there are still a few sensible things worth doing.

1. Submit a meter reading - Unless you have a smart meter sending readings automatically, it’s a good idea to send a meter reading around the day the new cap starts.

   That helps make sure your bill is based on actual usage rather than estimates.

2. Keep an eye out for updates from your supplier - Suppliers will contact customers whenever prices change, usually by email or letter. That update should include your new rates and standing charges.

3. Review your Direct Debit - If prices fall and you’ve built up credit over winter, it could be worth checking whether your monthly payments still look right for your expected usage.

4. Think about fixing your rates - If you’d rather avoid the ups and downs of future price cap changes, a fixed energy tariff could offer a bit more certainty over your monthly costs.