Home > Energy > Energy price cap costs and predictions
Energy price cap costs and predictions
Last Updated: 1 April 2026
As of 1 April 2026, the energy price cap is set at £1,641 per year for a typical dual-fuel household paying by Direct Debit.
However, future price caps are expected to go up because of the ongoing conflict in the Middle East. Switching to a Utility Warehouse fixed energy tariff could be a smart way to lock in your rates and protect your household from potential future price increases.
What is the current energy price cap?
On 25 February 2026, Ofgem announced that the new energy price cap will fall by 7% to £1,641 per year for an average household paying for gas and electricity by Direct Debit. This is a 7% decrease (approximately £117) compared to January-March 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 Q2 2026 (1 April – 30 June):
What is the energy price cap?
The energy price cap is the maximum price per unit of gas and electricity suppliers can charge customers on a standard (or ‘default’) variable tariff. It includes both the unit rate and the standing charge.
The cap is set to make sure that the prices of energy are fair to customers, while also covering suppliers’ costs of buying and supplying energy.
The price cap was introduced at the start of 2019 by the government and is set by the UK’s independent energy regulator, Ofgem. While the government sets the regulations for the energy sector, Ogfem operates within the regulations to enforce them.
Who sets the energy price cap?
The price cap was introduced at the start of 2019 by the government and is set by the UK’s independent energy regulator, Ofgem. While the government sets the regulations for the energy sector, Ogfem operates within the regulations to action them.
How to manage the energy price cap with UW
Our fixed tariffs give you price certainty by locking in your rates for a set period, helping you stay protected from future price increases as the energy price cap changes.
How is the energy price cap calculated?
Ofgem reviews and updates the price cap every three months a year (sometimes referred to as every ‘quarter’) to make sure if it fairly reflects the energy market at the time. The review happens every January, April, July and October.
The biggest factor that affects how the price cap itself is calculated is the changing costs of wholesale energy, which is the price suppliers have to pay to buy energy before distributing it to customers.
Other factors that affect the price cap include:
Operating costs – metering and billing customers.
Networking costs – maintaining the electricity wires and gas pipes that carry energy to your home. These networks are managed by a Distribution Network Operator (DNO), whose costs for infrastructure repairs and upgrades are factored into the cap.
Policy costs – supporting government-backed green energy initiatives. This includes funding for projects aimed at reducing greenhouse gases and lowering the nation’s overall carbon emissions.
VAT – the government sets VAT for energy at 5% for all tariff rates.
Earnings – the profit the supplier earns from bills.
Adjustment allowance – to account for any additional unexpected costs, such as supplier failures.
Past energy price cap rates
Here’s an overview of the previous energy price caps:
April - June 2026 (Current Cap) | Jan – Mar 2026 | October – December 2025 | July – September 2025 | April - June 2025 |
|---|---|---|---|---|
£1,641 per year | £1,758 per year (+0.2% from previous quarter) | £1,755 per year (+2.0% from previous quarter) | £1,720 per year (-7.0% from previous quarter) | £1,849 per year (+6.4% from the previous quarter) |
How will the energy price cap affect me?
Whether the energy price cap affects your monthly outgoings depends entirely on the type of energy plan you have.
If you’re on a variable rate tariff
If you are on one of our variable tariffs, the price cap changes will apply to you. This means your unit rates and standing charges will automatically be adjusted whenever a new Ofgem cap comes into effect.
Because these rates are flexible, you may see your bills fluctuate throughout the year based on both the current cap and your actual energy usage.
If you’re on a fixed rate tariff
If you’ve chosen to lock in your rates with a fixed tariff, your monthly bill won’t be affected by price cap changes for the duration of your contract.
This protects you from any sudden increases in the national cap. However, it also means you won’t automatically benefit from cap decreases until your fixed term ends.
Not sure which one is right for you? Read our guide on fixed vs variable energy tariffs to compare the benefits of flexibility versus long-term price security.
How can I reduce my energy bill?
Besides getting ahead of energy price cap rises by switching to a fixed energy tariff with UW, you can also take steps to reduce your overall energy usage and lower your bill.
Bundle more UW services for more energy discounts
Alongside energy, you can add broadband, mobile and insurance to your UW account. The more services you bundle, the more discounts you get. Learn about our pricing here.
Earn cashback on your everyday shopping
The UW Cashback Card is exclusive to our customers, and cardholders can get up to 10% cashback with UW’s retailer partners. All cashback earned with the card automatically comes straight off the next monthly bill.
Reduce your energy usage with these simple energy-saving tips
Cutting down on energy can be as simple as making sure all the lights are switched off in unused rooms, but also as unexpected as turning appliances off by the mains to prevent ‘phantom energy loss’.
Get a free smart meter with UW
Smart meters let you track your energy use in near-real-time, and display it in pounds and pence – so you can see how to adjust your habits more easily.