What is the Ofgem price cap — and does it affect you?
Last updated: 1 July 2026 · July 2026 cap now in effect
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.
| Previous (Apr–Jun 2026) | July 2026 (now in effect) | |
|---|---|---|
| Typical annual bill | £1,641 | £1,862 |
| Electricity unit rate | ~24.5p/kWh | ~25.7p/kWh |
| Gas unit rate | ~6.24p/kWh | ~7.7p/kWh |
| Standing charge (electricity) | ~61p/day | ~61p/day |
Source: Ofgem, 27 May 2026. Unit rates derived from Ofgem’s announced percentage changes (+5% electricity, +24% gas); we’ll refine when the resource pack publishes exact rates.
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?
Ofgem points to wholesale gas prices — up around 28% over the three months that fed into this cap calculation. The main driver is ongoing conflict in the Middle East disrupting global gas supply routes. That’s why this cap is a tale of two fuels: gas rates rose about 24%, electricity about 5%.
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. The price spikes earlier this year have now locked in higher bills for July to September, even if wholesale prices have eased since.
What does this mean for your bill?
A rise from £1,641 to £1,862 means roughly £221 more per year — about £18 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 heavy gas user will see more (gas rates rose 24%); an all-electric home will see less (electricity rose just 5%).
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 today’s rates and you won’t be affected by the July rise. Now that the cap is confirmed, fixed deals are likely to reprice quickly — 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 was the July cap confirmed?
Ofgem confirmed the new figures on 27 May 2026. The cap took effect on 1 July 2026 and runs until 30 September 2026, when the next quarterly cap will be announced. Use the BillLuma calculator to see exactly how the new cap hits your bill.
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 does the July 2026 price cap take effect?
Ofgem confirmed the new cap on 27 May 2026. The rates took effect on 1 July 2026 and run until 30 September 2026.
How much is the July 2026 price cap?
A typical dual-fuel direct-debit bill went from £1,641 to £1,862 a year, about £18 a month extra, or 13% overall. Electricity unit rates rose roughly 5% and gas roughly 24%.
Figures are based on Ofgem’s confirmed July 2026 price cap, announced 27 May 2026. We compare against the £1,641 Q2 cap on an apples-to-apples basis; Ofgem also publishes a separate “new typical bill” of £1,663 that reflects updated consumption assumptions. Per-kWh figures are derived from Ofgem’s announced percentage changes and will be refined when the resource pack publishes exact rates. BillLuma is not affiliated with Ofgem or any energy supplier.