Energy Price Cap
From April 1 to June 30 2025, the energy price cap is set at £1,849 per year for the average UK household. This represents a 6.4% increase compared to the previous period and is reviewed quarterly by Ofgem.
What is the Energy Price Cap?
The energy price cap is established by Ofgem, an independent regulator that oversees the energy market in England, Scotland, and Wales. Ofgem's primary goal is to protect customers on a standard variable tariff by setting a maximum limit on what energy suppliers can charge for each unit of energy and for standing charges. This cap is typically reviewed up to four times a year and is influenced by various factors.
Despite the protection afforded by the energy price cap, it is advisable for consumers to compare prices in order to find deals that may be cheaper than the current cap. This approach encourages competitiveness in the market.
Price Cap Rates
The current cap on unit rates and standing charges are:
- Electricity: 27.03p per kWh and 53.80p daily standing charge.
- Gas: 6.99p per kWh and 32.67p daily standing charge.
Will the Price Cap Increase?
Predicting future price cap figures is challenging due to numerous factors that affect prices. As global events become more unpredictable, making accurate forecasts becomes increasingly difficult due to their potential knock-on effects.
However, industry experts regularly release predictions to assist those considering fixing their tariffs.
Energy Price Cap Predictions
Early predictions from Cornwall Insights predict a slight decrease in July 2025.
| January - March 2025 | April - June 2025 | July - September 2025* | October - December 2025* | Compare Deals | |
|---|---|---|---|---|---|
| Annual Cost (£) | £1,738 | £1,849 | £1,735 | £1,754 | Compare Suppliers |
| Change (%) | +1% | +6% | -6% | +1% | Compare Suppliers |
*Future price cap rates are predictions from Cornwall Insights.
How Does the Energy Price Cap Work?
The overall price cap comprises several costs, with the majority allocated to wholesale costs, which are associated with acquiring the energy needed to supply UK homes.
Price Cap Costs
Here is a breakdown of the price cap costs for April to June 2025:
- Wholesale costs: £842 (+£86)
- Government policy & schemes: £198 (+£11)
- Network upkeep costs: £372 (+£2)
- Operating costs: £235 (+£4)
- Unexpected temporary costs: £28 (+/- £0)
- Earnings before interest and taxes (EBIT) allowance: £45 (+£2)
- Uncertain costs & risks: £20 (+£2)
- Payment uplift (covers payment types): £16 (+£1)
- Level allowance (direct debit and pre-pay): £6 (-£1)
- VAT (5%): £88 (+£5)
Overall increase in costs: +£111
Energy Price Cap History
|
Price Cap Period |
Annual Price Cap (£) |
Price Cap vs Previous Month |
% Change |
|---|---|---|---|
|
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% |
|
April - September 2022 |
£1,877 | +£661 | +54% |
|
October 2021 - March 2022 |
£1,216 | +£132 | +12% |
|
April - September 2021 |
£1,084 | +£91 | +9% |
|
October 2020 - March 2021 |
£993 | -£80 | -7% |
|
April - September 2020 |
£1,073 | -£16 | -1% |
*Source: Ofgem Price Cap
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Energy Price Cap FAQs
-
Do I Need To Apply For The Energy Price Cap?
Households do not need to apply for the energy price cap. Your energy provider is obligated to inform you if your tariff changes because of the price cap.
If you’re currently on a standard variable or default tariff, you will automatically be protected by the energy price cap.
-
Does the energy price cap apply to businesses?
No - the energy price cap does not apply to business energy.