What is the Ofgem price cap, and how is it set?

The Ofgem price cap limits what energy suppliers can charge per unit of gas and electricity, and per day for the standing charge, on default tariffs in Great Britain. It is not a cap on your total bill. Your final bill still depends on how much energy you use.

Ofgem, the energy regulator, sets the cap and updates it every three months, based on the costs suppliers face: wholesale energy, network charges, policy costs and operating expenses. The cap applies to standard variable and default tariffs, including people whose fixed deal has ended. It does not apply to fixed-rate deals or business contracts, and it covers England, Scotland and Wales: energy is regulated separately in Northern Ireland.

The level is quoted as a yearly bill for a typical household using average amounts of gas and electricity, so it is a benchmark, not a guaranteed bill. In July 2026 Ofgem lowered its estimate of typical use, so the July headline became £1,663 instead of £1,862 on the old basis. On the new basis the cap rose to £1,723 from October 2026 for a typical dual-fuel Direct Debit household. Ofgem said the rise reflected higher wholesale gas prices caused by the conflict in the Middle East.

For scale, Ofgem said in October 2026 that prices remained 52% below the height of the 2022 crisis, when the government capped typical bills at £2,500. So the cap moves in steps, four times a year.