Ofgem's energy price cap – what is it and does it affect me?

Ofgem’s energy price cap works by setting a maximum limit on how much suppliers can charge consumers for a unit of energy.

The idea behind the price cap is to provide a level of protection for consumers, and to prevent energy companies from charging excessively high prices.

<aside> ⚠️ Ofgem’s energy price cap is a cap on the unit rate cost of energy, not on your total bill. The more energy you use, the higher your bill will be.

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The cost of your energy is set by the price cap if you are one of the 29 million UK customers on a default or variable tariff.

If you are on a fixed rate, changes to the price cap will not impact the amount you pay while you are in contract.

Ofgem updates the price cap every three months to reflect changes to wholesale energy costs, as well as additional underlying costs for suppliers.

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From 1 April 2024, the price cap will fall by 12%, meaning a typical annual bill for a dual-fuel household paying by direct debit will drop from £1,928 to £1,690.

This will be the lowest level since the Russian invasion of Ukraine, and follows a sustained fall in wholesale gas prices.

Last updated: February 2024

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