⚡ Energy Price Cap UK: What It Means for Your Bills in 2025
With the rising cost of living continuing to squeeze household budgets across the UK, understanding the energy price cap has never been more important. It directly affects how much you pay for your gas and electricity if you’re on a standard variable tariff — which most people are.
In this complete guide, we break down what the energy price cap is, how it works, what the current rates are, and how to make sure you’re not overpaying.
🔍 What Is the Energy Price Cap?
The energy price cap is a limit on the maximum price suppliers can charge customers on default or standard variable energy tariffs. It was introduced in 2019 by Ofgem (the UK’s energy regulator) to prevent unfair pricing — particularly for those who haven’t switched providers or are on out-of-contract rates.
It covers:
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Unit rates (the price per kilowatt-hour for gas and electricity)
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Standing charges (the daily fixed cost just for having an energy supply)
Important: The price cap is not a total cap on your bill — it only limits what you pay per unit. The more energy you use, the more you’ll pay.
📅 How Often Does the Price Cap Change?
From October 2022, Ofgem moved to quarterly updates — meaning the price cap is reviewed and adjusted every three months to reflect wholesale energy prices.
New cap periods are:
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1 January – 31 March
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1 April – 30 June
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1 July – 30 September
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1 October – 31 December
Each change is announced several weeks before the new period starts.
📈 Current Energy Price Cap (July–September 2025)
As announced by Ofgem, the energy price cap for 1 July – 30 September 2025 for a typical dual-fuel household paying by direct debit is:
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£1,568/year (based on average usage: 2,700kWh electricity + 11,500kWh gas)
This includes:
| Energy | Unit Rate | Standing Charge |
|---|---|---|
| Electricity | ~23.9p per kWh | ~60p/day |
| Gas | ~6.2p per kWh | ~31p/day |
(Source: Ofgem Price Cap Data)
Your actual bill may be higher or lower depending on your usage and region.
🏦 How Are UK Banks Responding to Rising Energy Costs?
Several UK banks now offer support for customers struggling with their energy bills or looking to budget more effectively:
| Bank | Energy Support Services |
|---|---|
| Barclays | Access to budgeting tools and energy saving tips via the Barclays app |
| HSBC UK | Offers guidance through their Money Management Hub, including utilities tracking |
| Lloyds Bank | Provides customer support for those in energy arrears and offers payment holidays |
| NatWest | Carbon footprint tracking and energy savings insights via their banking app |
While banks don’t directly control your energy rates, many now partner with energy providers or offer tools to help track and reduce usage.
💬 Why Does the Price Cap Exist?
Before the cap, energy companies could charge significantly more to customers who didn’t regularly switch suppliers — often older or vulnerable people.
The cap was introduced to:
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Protect consumers from being ripped off
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Encourage fair competition
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Reflect the real cost of energy procurement
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Prevent “loyalty penalties” for non-switchers
However, it’s not meant to be a long-term solution. The UK government and Ofgem have suggested it may be phased out once the market becomes more competitive and stable.
⚠️ What Happens If You’re On a Fixed Tariff?
If you’re on a fixed-rate energy deal, the price cap doesn’t apply to you — your rate is locked in for the duration of the contract. This could be a good or bad thing depending on market conditions.
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If your fixed rate is lower than the cap, you’re in a strong position.
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If your fixed rate is higher, you may wish to exit (check for exit fees).
When your fixed deal ends, unless you switch, you’ll usually be moved onto a standard variable tariff, which is capped.
📉 Can the Price Cap Go Down?
Yes. If wholesale energy prices drop significantly, the cap can fall. For example, in early 2024, falling global gas prices led to a drop of more than £200 in the cap level.
However, there are no guarantees, and Ofgem adjusts based on real-time data. Global factors (like wars, supply issues, or economic crises) can also cause prices to rise quickly.
🔎 How to Find Out Which Tariff You’re On
To check whether the energy price cap applies to you:
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Check your most recent energy bill
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Look for terms like “standard variable”, “default”, or “SVT”
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Log into your energy supplier’s online account for tariff details
If you’re on a fixed tariff, your rate should be clearly shown, and the price cap won’t apply.
🧮 How to Estimate Your Bill Using the Price Cap
If you want to manually estimate your bill:
🆘 What If You Can’t Afford Your Energy Bills?
There’s help available:
1. Talk to Your Supplier
They must offer a payment plan or hardship support.
2. Apply for Government Support
You may be eligible for:
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Warm Home Discount (£150 off your bill)
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Cold Weather Payments
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Winter Fuel Payment
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Cost of Living Payments
More info: Help for Households – GOV.UK
3. Get Debt Advice
Charities like StepChange and Citizens Advice can help you manage arrears and create repayment plans.
✅ Summary: What You Need to Know About the Energy Price Cap
| Topic | Key Info |
|---|---|
| What is it? | A cap on unit rates and standing charges for default energy tariffs |
| Who sets it? | Ofgem (updated every 3 months) |
| Current cap | ~£1,568/year for average usage (July–Sept 2025) |
| Does it cap your whole bill? | No — just the price per unit |
| Should I switch? | If a fixed tariff is cheaper, yes |
| What if I can’t pay? | Contact supplier, apply for support, or get free debt advice |
🔍 Final Thoughts: Stay Informed, Stay Empowered
The energy price cap affects tens of millions of UK homes — but many people still don’t fully understand what it means. By staying up to date with cap changes, comparing tariffs, and tracking your energy usage, you can take control of your bills and avoid overpaying.
And if you’re struggling, you’re not alone — speak to your supplier, check if you’re eligible for help, and use all the free tools available.