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.

</aside>

The cost of your energy is set by the price cap if you are one of the 22 million UK customers on a default or variable tariff.

If you are one of the 11 million households 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.

https://public.flourish.studio/visualisation/21689475/

The price cap increased by 6.4% on 1 April 2025.

The annual bill for a typical dual-fuel household paying by direct debit rose from £1,738 to £1,849 – an increase of £111.

This £111 annual increase equates to approximately £9.25 more per month.

The primary driver behind this rise is a recent spike in wholesale energy prices, accounting for about 78% of the total increase, with the remaining 22% attributed to policy costs and associated inflationary pressures.

The price cap is based on a typical household's energy usage.

However, actual energy consumption varies depending on household size, energy efficiency, and lifestyle.

Last updated: April 2025

<aside> 💬 Help us improve this page

We are keen to make this section of our website as useful as it can be. Please contact us if you see errors or omissions, or if you think there are additional resources it should include.

</aside>