What is the Ofgem price cap — and does it affect you?
Last updated: 1 May 2026 · July cap forecast — confirmed figure added 27 May 2026
You’ve probably seen the Ofgem price cap in the news and wondered what it actually means for your bill. The short version: it limits how much your energy supplier can charge you per unit of gas or electricity. The longer version is a bit more nuanced — and once you understand it, your energy bill makes a lot more sense.
The most important thing to know: it’s not a cap on your total bill. It’s a cap on the rate you pay. Use more energy, pay more.
What exactly is the price cap?
Ofgem — the energy regulator — sets maximum rates for unit prices and standing charges every three months. Suppliers cannot charge more than these rates to customers on standard variable tariffs. The cap changes quarterly based on what it costs suppliers to buy energy on wholesale markets.
Think of it like a speed limit: it stops suppliers going above a certain rate, but your actual bill still depends on how much energy you use.
| Current (Apr–Jun 2026) | July 2026 (forecast) | |
|---|---|---|
| Typical annual bill | £1,641 | ~£1,836–£1,972 |
| Electricity unit rate | ~24.5p/kWh | ~27.5p/kWh (forecast) |
| Gas unit rate | ~6.24p/kWh | ~7.00p/kWh (forecast) |
| Standing charge (electricity) | ~61p/day | ~65p/day (forecast) |
Forecasts based on Cornwall Insight and analyst predictions as of April 2026. Ofgem confirms on 27 May 2026.
Who does the price cap affect?
It affects you if you’re on a standard variable tariff (SVT) — the default tariff you end up on if you’ve never actively chosen an energy deal. Around 19 million UK households are on SVTs. If you’ve never actively chosen an energy deal, you’re almost certainly on one.
It does not directly affect you if you’re on a fixed tariff — your rates are locked in until your fix ends, regardless of what the cap does. When your fixed term expires, you’ll roll onto an SVT and the cap will apply.
Why is the July 2026 cap higher?
Conflict in the Middle East — specifically the US-Iran tensions that escalated in early 2026 — disrupted global gas supply routes and pushed UK wholesale gas prices to levels not seen since 2023.
UK electricity prices are closely tied to gas prices, even if you have an electric boiler or hob. That’s because gas-fired power stations still set the market price for electricity across the national grid. When gas goes up, so does your electricity bill.
Ofgem doesn’t calculate the cap on today’s prices — it uses a rolling average of wholesale costs over the three months before the announcement. This means a price spike in February and March locks in higher bills from July, even if wholesale prices have eased since.
What does this mean for your bill?
A rise from £1,641 to £1,900 (mid-forecast) means roughly £260 more per year — about £22 per month extra on your direct debit.
But this is for a typical household using the Ofgem benchmark amount of energy. Your actual increase depends on how much energy you use and what tariff you’re on. A large detached house with poor insulation could see much more; a one-bed flat with modern appliances could see less.
Find out your personal impact
Upload your bill and we’ll calculate exactly how the new cap affects you — based on your actual usage, not a national average.
Check my billCan you avoid the price cap increase?
1. Switch to a fixed tariff before 1 July
Lock in current rates and you won’t be affected by the July rise. Best deals are narrowing as the announcement date approaches, so sooner is better. Takes 15 minutes. Your supply never cuts off. Cancel anytime.
2. Reduce your usage
Better insulation, smarter heating habits, and efficient appliances all lower how many units you use — which directly lowers your bill regardless of what the cap does.
3. Check you’re not already overpaying
Some households on SVTs are already paying more than the cap rate through legacy tariff structures. BillLuma can help with this — upload your bill and we’ll tell you in plain English what you’re actually paying.
When will Ofgem confirm the July cap?
Ofgem will publish the confirmed July 2026 price cap by 27 May 2026. We’ll update this page and the BillLuma calculator with the confirmed figure as soon as it’s announced.
Common questions
What is the Ofgem price cap?
The Ofgem price cap limits the maximum unit rate and standing charge that energy suppliers can charge customers on a standard variable tariff in Great Britain. It's set every three months based on wholesale energy costs. It caps the rate you pay — not your total bill.
Who does the Ofgem price cap affect?
Around 19 million UK households on a standard variable tariff (SVT). If you've never actively chosen an energy deal, you're almost certainly on one. Fixed-tariff customers aren't affected until their fix ends.
When is the July 2026 price cap announced?
Ofgem is due to publish the confirmed July 2026 price cap on 27 May 2026. The new rates take effect from 1 July 2026.
How much will the July 2026 price cap be?
The confirmed figure isn't available yet. Analyst forecasts suggest the typical annual bill will rise from £1,641 to roughly £1,836–£1,972. Ofgem confirms the figure on 27 May 2026.
All figures marked as forecast are estimates based on analyst predictions as of April 2026. The confirmed July 2026 price cap will be published by Ofgem on 27 May 2026. BillLuma is not affiliated with Ofgem or any energy supplier. We earn a small commission if you switch — it doesn’t affect our advice.