What will the energy cap changes mean for my bills?

The energy cap fixes the maximum amount which customers on standard variable tariffs can be charged for each unit of gas and electricity used.

It covers around 33 million households in England, Wales and Scotland and is set by the regulator Ofgem every three months, external.

Of the 33 million:

around 19 million pay by direct debit

around 7 million pay by standard credit (they pay when they get a bill)

around 6 million have prepayment meters

The typical annual usage figure applies to the first category: dual-fuel households on a standard variable tariff which pay by direct debit.

Between 1 July and 30 September, their gas prices will be capped at 7.33 pence per kilowatt hour (kWh), up from 5.74p. Electricity prices will be capped at 26.11p per kWh, up from 24.67p.

It means that a typical household will pay £1,862, up from £1,641 between 1 April and 30 June.

But customers' actual bills depend on the amount of energy used and how they pay for it.

The typical annual bill for customers who pay by standard credit will be £2,005, up 13% from £1,772.

The typical annual bill for prepayment customers will be £1,812, up 13% from £1,597.

Ofgem regulates the energy market in England, Scotland and Wales. Northern Ireland has a separate system.

Although the price cap sets the unit prices for gas and electricity, your household's actual bill depends on the overall amount of energy you use, and how you pay for it.

Where you live, the type of property you have, how energy efficient it is, how many people live there, and the weather all make a difference.

The Ofgem cap is based on "typical" household energy use in a year with a single bill for gas and electricity settled by direct debit.

The vast majority of people pay their bill this way to help spread payments across the year.

The regulator has previously calculated that a "typical" household uses 11,500 kWh of gas and 2,700 kWh of electricity in a year.

However, it is reducing this "typical" energy use because many households have cut back due to high prices in recent years and are benefiting from improvements in energy efficiency.

Its new estimates assume annual use of 9,500 kWh of gas and 2,500 kWh of electricity.

Using these numbers the typical average bill since 1 July is £1,663.

On this basis, typical annual bills for dual fuel direct debit households under the current energy cap would be £1,490. That means the 1 July figure is a 12% increase, similar to the 13% rise under the previous assumptions.

Ofgem previously changed its consumption estimates in 2019 and 2023.

Since 1 April, charges related to the insulation scheme - called the Energy Company Obligation - have been scrapped, and for three years, renewable energy projects will be 75%-funded by general taxation instead of a levy on energy bills.

Before the changes, energy bills in England, Scotland and Wales included additional charges to help fund insulation for low-income households, and subsidise green energy projects such as wind farms and solar panels.

Nearly everyone in England, Wales and Scotland will benefit from this cut, although the amounts will vary between households.

However, the cost of maintaining and strengthening energy network infrastructure like power lines, cables and gas pipes is rising.

In December 2025, Ofgem said it had approved a £28bn investment to improve the electricity and gas grids in Great Britain.

It said this will strengthen the energy supply, and better shield customers from volatile energy prices. It will also reduce Britain's dependence on gas.

Customers will pay part of the cost of the upgrade, through an additional £108 added to energy bills by 2031.

These charges started to appear from April 2026, adding about £6 a month to the bill for a typical household covered by the energy cap.

In April, the government also announced separate plans to change the way electricity is priced to ensure that household energy bills are less vulnerable to spikes in gas prices.

It also wants customers to benefit more from the cheaper running costs of renewable energy sources like wind and solar power.

The government has not said how much bills might fall but believes savings could be "significant". It said the changes could be in place by spring 2027.