The Energy Price Cap Explained: What It Limits and What It Does Not

The energy price cap is the most a supplier can charge for each unit of gas and electricity, and for each day’s standing charge, on a standard variable tariff. Ofgem sets it every three months. It does not cap your total bill: the more you use, the more you pay.

What the cap limits

• The unit rate: pence per kWh of gas and of electricity.
• The standing charge: pence per day for each fuel.
• Rates differ by region and by how you pay: direct debit, on receipt of a bill, or prepayment.

What it does not limit

• Your total bill, which depends on how much you use.
• Fixed tariffs, whose prices are set by the contract for its term.
• What a supplier charges on tariffs other than standard variable and default ones.

When it changes

Ofgem reviews the cap every three months, for 1 January, 1 April, 1 July and 1 October, and announces each new level about a month before. If you are on a standard variable tariff, your rates follow it automatically; your supplier writes to you before a change.

The typical household figure

Ofgem also publishes what a typical household would pay a year at the capped rates. It is an illustration built on typical use, not a limit: your own bill depends on your own use, so compare your annual kWh, not the typical figure.

If you are on a fixed tariff

Your rates stay as the contract says until the fix ends, whatever the cap does. When it ends you move to your supplier’s standard variable tariff, at the capped rates, unless you choose another. When a fixed tariff ends covers the last 49 days.

How Wisemium helps

Upload your energy bill to Wisemium and it reads your supplier, tariff, unit rates and standing charges for you to confirm, keeps any fixed term end date on record, and shows how your monthly payment compares with Ofgem’s published typical figure. Wisemium does not supply energy or set prices.