What Is The Current Energy Price Cap?
The current energy price cap is £1,849 per year for a typical UK household. This price is in effect between 1 April and 30 June 2025. Ofgem announced a 6.4% increase from the last price cap.
It may be worth comparing energy prices to see if you can save money against this cap.
The price cap is reviewed every three months by the market regulator to reflect changes in wholesale prices.
The energy price cap is the maximum amount suppliers can charge for gas and electricity. However, it's important to remember that this does not put a maximum amount you can be charged for your bills.
The actual amount charged by suppliers will depend on your consumption. The cap is on the price per unit and figures used in example are based on average UK household consumption.
Energy Price Cap Prediction
Current predictions from Cornwall Insight suggest a decrease of 9% in July 2025. The latest prediction has been updated in May 2025 and may change before the official Ofgem announcement.
What Could Happen To Energy Prices in Winter 2025?
Currently, predictions point towards a further reduction in October 2025 and January 2026. This is subject to change as geopolitical events may impact this.
So, what does this mean for the switching market for homes and businesses?
What Does This Mean For Energy Switching?
Energy switching is well and truly back. There are deals for business energy and some great options for households, too. It is arguably one of the best times in recent years to grab a fixed-rate deal, but each circumstance is different. Either way, there’s no harm in comparing energy tariffs now in case you can get a better deal than you’re currently on.
Compare our best energy deals and switch in minutes
Are Energy Prices Increasing?
According to analysts at Cornwall Insights, this isn't unexpected and is a direct result of the fluctuations in wholesale energy prices. Dr Craig Lowry at the group has highlighted that we cannot assume that prices will continue to fall, and higher prices may become the new “normal”.
Wholesale energy prices may be predicted to increase slightly at the beginning of 2025, but then it is expected to fall slightly towards the back end of the year. UK Parliament states that the future energy price cap remains uncertain and there is no guarantee that prices will fall at this time.
Interested in finding out what you could be paying? Take a look at our live online prices to see if we can help you grab a better deal.
What Does This Mean For Business Energy?
There is no price cap for business customers, however, prices are competitive for commercial energy. Many business owners are securing great rates and locking in a great deal to avoid any future price fluctuation.
Energy Price Cap (p/per kWh)
| Charge | October - December 2024 | January - March 2025 | April - June 2025 | July - September 2025 (prediction) |
|---|---|---|---|---|
|
Electricity unit rate (p/per kWh) |
24.5p | 24.86p | 27.03p | 25.33p |
|
Gas unit rate (p/per kWh) |
6.24p | 6.34p | 6.99p | 6.19p |
July to September 2025 is a prediction from Cornwall Insight.
How has the energy price cap unit rate changed?
Although we're paying more than we used to a few years back, we can expect prices to only fluctuate a little in comparison to the highs seen in the energy crisis.
The price cap is managed by the energy regulator Ofgem to ensure that suppliers charge fairly by wholesale costs. The price cap is on the unit rate per kWh used, and your bill will be based on how much gas & electricity you use.
Remember this is the maximum tariff you should be paying - you can compare energy deals to see if you can get an even cheaper unit rate.
How Does Ofgem Calculate The Price Cap?
As this is putting a cap on energy supplier profits, calculating the price cap has a variety of factors that must be considered. Ofgem has released some information on how they set the price cap:
Wholesale energy costs - the baseline consideration is how much the supplier pays for the energy it later provides UK households
Network upkeep costs - the costs relating to the maintenance of energy buildings and maintaining the network that delivers the energy to each home. This includes any operating costs
Government policies - any government schemes are considered when applying the price cap
5% VAT is added
Energy Price Cap Costs
Other costs go into the price cap, such as adding a direct debit uplift to ensure that customers who pay by pre-payment do not pay more than those who pay by direct debit.
The full breakdown of energy price cap cost changes for the April to June 2025 energy price cap, as provided by Ofgem for direct debit customers, is as follows:
- Wholesale costs: £842 (+£86)
- Network costs: £372 (+£2)
- Adjustment allowance: £28 (+£0)
- Operating costs: £235 (+£4)
- Government policy/schemes: £198 (+£11)
- Earnings before interest & taxes (EBIT): £45 (+£2)
- Headroom for uncertain costs: £20 (+£2)
- Payment uplift: £16 (+£1)
- Levelisation allowance: £6 (-£1)
- VAT at 5%: £88 (+£5)
- Overall increase: +£111
Source: Ofgem
Can I Switch In 2025?
Energy suppliers have started offering fixed-rate deals. This means you might be able to lock in a great deal in 2025.
Ofgem's Energy Price Cap History
It’s fair to say the energy price cap has seen its fair amount of fluctuation. The table below looks at each time the cap was set over the last few years, for a typical medium household paying by direct debit.
| Price Cap Period | Ofgem Energy Price Cap | Price Cap Change vs Previous Month | Price Cap Change vs Previous Month |
|---|---|---|---|
| April - June 2025 | £1,849 | +£111 | +6% |
| January - March 2025 | £1,738 | +£21 | +1% |
| October - December 2024 | £1,717 | +£149 | +10% |
| July - September 2024 | £1,568 | -£122 | -7% |
| April - June 2024 | £1,690 | -£238 | -12% |
| January - March 2024 | £1,928 | +£94 | 5% |
| October - December 2023 | £1,834 | -£142 | -7% |
| July - September 2023 | £1,976 | -£1,140 | -37% |
| April - June 2023 | £3,116 | -£943 | -23% |
| January - March 2023 | £4,059 | +£688 | 20% |
| October - December 2022 | £3,371 | +£1,494 | 80% |
| Summer 2022 | £1,877 | +£661 | 54% |
| Winter 2021/22 | £1,216 | +£132 | 12% |
| Summer 2021 | £1,084 | +£91 | 9% |
| Winter 2020/21 | £993 | -£80 | -7% |
| Summer 2020 | £1,073 | -£16 | -1% |
| Winter 2019/20 | £1,089 | -£70 | -6% |
| Summer 2019 | £1,159 | +£106 | 10% |
| Winter 2018/19 | £1,053 | - | - |
Source: Ofgem data 2025.
When Was The Energy Price Cap Introduced?
The first price cap for default energy tariffs, or standard variable tariffs (SVTs) as they’re often referred to, was established on 1 January 2019 by Ofgem - the Office of Gas and Electricity Markets.
Since 1 April 2017, there has also been a price cap protecting customers on prepayment meter tariffs, which covers around 4 million energy consumers.
Why Was The Price Cap Introduced?
The aim of establishing the default tariff price cap was to provide protection to some 11 million energy customers across the UK, ensuring they paid a fair price for the energy they used to power their homes.
The price cap is set so energy suppliers can’t charge their customers whatever they want per kWh of energy they use, while also reflecting on the wholesale energy market so suppliers aren’t buying energy at a more expensive rate than they’re selling at.
How Often Does The Energy Price Cap Change?
Ofgem reviews the energy price cap every three months. This has changed due to fluctuating energy prices as they only used to review it twice a year.
Deep Dive Into The Price Cap History
January 2019
When the price cap was first established suppliers could set the rate of their standard variable tariffs as they wished. The average annual price of an SVT was set to £1,137, which worked out at £94.75 on average per month. However, this was then adjusted in February 2019 to £1,254 - a monthly SVT average of £104.50.
August 2019
The next price cap announcement saw the annual SVT average drop to £1,179 with a monthly average cost of £98.25.
February 2020
It dropped again in February 2020 to £1,162 and a monthly average of £96.83.
Ofgem changes average usage
Between the February and August price cap announcements, Ofgem changed how they calculated the price cap by lowering the household average energy usage of electricity to 2,900 kWh from 3,100 kWh.
August 2020
Due to wholesale energy prices plummeting from lack of demand during the first Covid-19 lockdown, the price cap dropped to its lowest-ever recorded price of £1,042 with a monthly average of £86.83.
February 2021
As the lock down began to ease and people started to venture out, wholesale energy prices started to climb, which caused the price cap announcement of February 2021 to increase by £96 to £1,138 and a monthly average of £94.83.
August 2021
With wholesale prices still climbing, the price cap rose again to £1,277 with a monthly SVT average of £139 - the highest price cap to date.
April 2022
Wholesale energy prices continued to surge to £1,971 with a monthly average cost of £164,25.
October 2022
Wholesale prices continued to rise further to a staggering £3,549, averaging a monthly cost of £295.75. The government introduced the Energy Price Guarantee to bridge the gap of rapidly increasing energy costs. This was set at £2,500 per year for typical household usage.
April 2023
The Energy Price Guarantee was scheduled to end. This was extended until July 2023. It was extended as predictions had the price cap increasing hitting £3,280 for typical households.
July 2023
Energy switching coming back? Yes! Ofgem announces the price cap drops to £2,074 and becomes active once again under the temporary price guarantee.
October 2023
Ofgem lowers the price cap drops to £1,923.
January 2024
For January to March 2024, Ofgem the price cap for a typical gas and electricity using customer that pays by direct debt is £1928, an increase of 5%.
April 2024
For April to June 2024, the Ofgem price cap for a typical customer that uses gas and electricity paying by direct debit lowers to £1690, a 12% decrease on the previous quarter.
Energy Price Cap FAQs
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What is a typical customer?
Ofgem has outlined that the typical UK customer has an electricity consumption of 2,700 kWh and a gas consumption of 11,500 annually.
These figures are great for a general guideline and it is not the limit you could pay. Your bill will depend on your household consumption.
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How often does the energy price cap change?
The energy price cap changes quarterly.
January - March (Q1)
April - June (Q2)
July - September (Q3)
October - December (Q4)