Ofgem Price Cap Explained: What’s Changing for Your Energy Bill
Energy costs are still one of the biggest worries for UK households. Every three months, the Ofgem price cap sets a limit on what suppliers can charge for each unit of gas and electricity you use. When that cap rises, around 34 million homes on standard variable tariffs feel the impact straight away, often through higher bills landing on the doormat.
So, how does the Ofgem energy price cap actually work, and what are the latest figures for 2025? We’ll break it down clearly below and share a few practical ways to help you stay in control of your energy costs.
What Is the Ofgem Price Cap, Exactly?
The Ofgem energy price cap is a rule that limits how much energy suppliers in Great Britain can charge per unit of gas and electricity and for the daily standing charge. It applies to anyone on a standard variable tariff, the default deal you move onto when your fixed-rate contract ends.
That means the cap doesn’t set a single price for everyone’s bill. Instead, it limits the rates suppliers can charge. If you use more energy, you’ll still pay more; if you use less, you’ll pay less. What the cap does is make sure the unit prices stay fair and reflect real market costs.
Here’s a clearer look at how it works:
What it limits:
The cap controls both
the unit price: what you pay per kilowatt hour (kWh) for the energy you actually use
and the standing charge: the daily fee you pay just for being connected to the energy network.
Who it covers:
Roughly 34 million households in England, Scotland, and Wales who are on default or standard variable tariffs (SVT). It includes
Direct Debit
Prepayment
Economy 7
and standard credit customers.
Fixed-rate tariffs aren’t affected.
Why it exists:
To make sure energy companies don’t overcharge when market prices go up or fail to pass on savings when prices fall.
How it’s set:
Ofgem reviews the cap every three months, updating it to match real-world changes, like the cost of buying gas and electricity on the wholesale market, running networks, and meeting government policy costs.
The headline “typical household bill” that you see in Ofgem’s updates is based on its Typical Domestic Consumption Values (TDCVs). These figures give you a simple idea of what’s considered average energy use for different types of homes in Great Britain.
Energy use | Example home / residents | Typical annual gas use | Typical annual electricity use | Typical annual electricity use (multi-rate, e.g. Economy 7) |
Low | Flat or 1-bed house; 1–2 people | 7,500 kWh | 1,800 kWh | 2,200 kWh |
Medium | 2–3 bed house; 2–3 people | 11,500 kWh | 2,700 kWh | 3,900 kWh |
High | 4+ bed home; 4–5 people | 17,000 kWh | 4,100 kWh | 6,700 kWh |
Ofgem uses the medium-use household as its benchmark when setting and announcing new price caps each January, April, July, and October. That means a home using around 11,500 kWh of gas and 2,700 kWh of electricity per year represents the “typical” household in Ofgem’s calculations.
The Latest Ofgem Price Cap Figures for 2025
The latest Ofgem price cap update covers the period from October to December 2025. For a typical dual-fuel household on a standard variable tariff paying by Direct Debit, the annual bill is now £1,755.
That’s a 2% increase compared with the previous quarter, adding around £2.93 a month or £35.14 a year to the average bill. It’s a small rise, but one that many households will still feel, especially with other living costs remaining high.
Here’s what that Ofgem price cap energy bill update looks like for the unit rates and standing charges:
Type | Unit rate | Standing charge |
Electricity (Direct Debit) | 26.35p per kWh | 53.68p per day |
Gas (Direct Debit) | 6.29p per kWh | 34.03p per day |
So, the Ofgem price cap per kWh is now 26.35 pence for electricity and 6.29 pence for gas. These figures are based on typical energy use and include 5% VAT. The actual amount you pay depends on your region and usage. For example, rates are typically higher in the South West and lower in the North. You can check Ofgem’s tables for your exact regional figures.
Why the cap increased for this quarter
The small Ofgem price cap rise for autumn 2025 comes down to a mix of cost movements. Wholesale energy prices dipped slightly, but network maintenance and policy costs increased enough to push the overall cap up by around 2%.
For most households, that means only a modest change, but it’s still worth keeping an eye on, especially if your usage is above average or you’re on a prepayment meter.
How the Ofgem price cap has changed through 2025
Period (2025) | Typical Annual Bill | Change from Previous Quarter | Electricity Unit Rate | Gas Unit Rate |
Jan–Mar | £1,738 | ▲ +1.2% | 24.86p per kWh | 6.34p per kWh |
Apr–Jun | £1,849 | ▲ +6.4% | 27.03p per kWh | 6.99p per kWh |
Jul–Sep | £1,720 | ▼ −7.0% | 25.73p per kWh | 6.33p per kWh |
Oct–Dec | £1,755 | ▲ +2.0% | 26.35p per kWh | 6.29p per kWh |
How to Manage Your Energy Costs Under the Price Cap
The price cap helps limit what energy suppliers can charge, but it doesn’t set your total bill. What you actually pay still depends on how much energy you use and how you manage it. Here are some practical ways to stay in control.
1. Compare tariffs and payment methods
Start by confirming your tariff and payment method. The cap applies only to standard variable tariffs, so if you’re on a fixed deal, the cap doesn’t affect your rates.
Direct Debit is usually the cheapest way to pay.
Prepayment and standard credit customers often face slightly higher standing charges.
If you’ve been on your supplier’s default tariff for a while, compare deals. Fixed tariffs sometimes beat the cap when wholesale prices fall.
Use Ofgem-accredited comparison sites, like Money Supermarket and My Utility Genius, to compare suppliers and fixed deals.
When comparing, look at:
Unit rates and standing charges, not just “typical bills.”
Exit fees, if you might switch again soon.
Whether the tariff requires a smart meter or has time-of-use pricing.
Switching is quick, usually within five working days, and there’s no risk of your supply being cut during the process.
2. Get a smart meter and actually use it
Smart meters do more than send readings. They come with a display that shows what you’re spending, minute by minute. You’ll quickly see which habits cost the most, whether that’s long showers, tumble-drying, or the always-on second fridge.
If you have an older Economy 7 or day/night meter, ask your supplier about a smart upgrade. It’ll make your bills more accurate and help you see if off-peak rates are saving you money.
3. Use energy when it’s cheaper
Many suppliers now offer time-of-use (TOU) or dynamic tariffs, where prices change through the day. These can work in your favour if you can run your dishwasher or charge an EV overnight.
If you’re not home much during off-peak hours, though, these tariffs might not help. Check your usage pattern before switching. Most smart meters let you download a 30-minute breakdown.
4. Improve your home’s insulation and cut heat waste
Good insulation is one of the easiest ways to keep heat in and bills down. A well-insulated home stays warmer for longer, so your boiler or heat pump uses less energy.
Check the basics: Make sure your loft and walls are insulated. Homes without loft insulation can lose up to a quarter of their heat through the roof.
Stop draughts: Seal gaps around doors, windows, and floors. Cheap DIY draught strips or excluders make a big difference.
Windows matter too: Even temporary secondary glazing film helps if replacing windows isn’t an option.
Set thermostats and timers carefully: A one-degree drop in room temperature can save around £100 a year for a typical home. Using thermostatic radiator valves (TRVs) can avoid heating unused rooms.
See if you qualify for grants: The Energy Company Obligation (ECO) or Home Upgrade Grant schemes can help with insulation costs.
5. Use energy-efficient appliances
Appliances quietly add up on your electricity bill, especially older ones. Newer models often use far less energy for the same job.
Check efficiency labels: Look for A-rated appliances under the new UK energy labels. The most efficient models use up to 40–60% less energy than older equivalents.
Upgrade the big users first: Fridges, washing machines, and tumble dryers run often, so replacing them saves most.
Use eco settings and full loads: Lower temperatures and full drum cycles cut energy and water use.
Unplug on standby: TVs, consoles, and routers still draw power when “off.” Smart plugs or timers can save £50–£80 a year.
6. Look long-term: solar panels and home batteries
If you’re ready to think beyond short-term savings, pairing solar photovoltaic panels with home batteries can make a real difference. These systems generate and store power during the day and feed it back when you need it most. They can cut what you buy from the grid, help you shift use to cheaper times, and provide backup power during outages.
The EcoFlow STREAM series is a good example of how flexible solar plants have become. The system combines STREAM smart batteries with high-efficiency solar panels that can be placed on balconies, rooftops, gardens, or façades. Everything is modular, so you can start small and expand later.
If you already have solar panels and inverter
The EcoFlow STREAM AC Pro/AC adds battery storage to an existing setup easily. It uses AC-coupling technology, which means it can connect to most microinverters or plug straight into a normal wall socket. It stores extra solar power during the day and uses it later, keeping your fridge, Wi-Fi router, TV, fans, or dehumidifier running through the night.
Battery capacity (STREAM AC Pro & AC): 1.92 kWh
STREAM AC Pro output: 1,200W (800W grid-tied)
STREAM AC output: 800W
The modular design lets you add extra STREAM AC Pro or AC battery units to reach up to 11.52 kWh of storage, a practical scale for most homes.
EcoFlow STREAM AC Pro/AC
The EcoFlow STREAM Ultra X + 2 x 450W Rigid Solar Panel bundle gives you energy generation, storage, and management in one integrated setup. Like the Ultra, the Ultra X comes with a built-in microinverter, charge controller, and battery, so you can simply connect solar panels and start generating power right away.
The Ultra X starts with 3.84 kWh of storage and can expand up to 23 kWh. It handles 2,000W of solar input through four MPPT channels and delivers 1,200W AC output (or 800W grid-tied).
If you add more units, you can reach 2,300W AC output using Parallel mode. With two to four 450W panels (around 900–1,800Wp total), the system fully recharges during the day, giving you steady, reliable power for evenings or cloudy weather.
STREAM Ultra X + 2 x 450W Rigid Solar Panel
Conclusion
The Ofgem price cap helps keep energy prices fair, but it isn’t a guarantee of lower bills. What really makes the difference is how you manage your usage, choose your tariff, and improve your home’s efficiency. By combining smart habits with long-term steps, like better insulation, efficient appliances, or even solar energy, you can take control of your energy costs and stay ahead, whatever the next price cap brings.
FAQs
What is the current Ofgem price cap?
From 1 October to 31 December 2025, the Ofgem price cap for a typical dual-fuel household paying by Direct Debit is £1,755 a year across Great Britain. That figure is based on average unit rates of 26.35p per kWh for electricity (with a 53.68p daily standing charge) and 6.29p per kWh for gas (with a 34.03p daily standing charge).
Compared to the previous quarter, this represents a 2% increase, which amounts to about £2.93 more monthly or £35.14 annually on the bills of a typical household. That said, the cap limits what suppliers can charge per unit of energy, not your total bill. How much you pay still depends on your usage and region.
Will energy prices go down in 2025?
Energy prices fell in July 2025 when the price cap dropped by 7% to £1,720, but they rose again in October by 2% to £1,755. There are no more changes for the rest of 2025, and the next update, covering January to March 2026, will be announced by 25 November 2025. Analysts currently expect a slight fall early in 2026, rather than any big drop before the year ends. In short, prices dipped mid-year but finished 2025 a touch higher than in summer.
Why is Ofgem increasing the price cap?
The Ofgem energy price cap increase for October–December 2025 is mainly because network charges and some policy-related costs rose. These cover the expenses of maintaining and improving the UK’s energy networks, as well as government schemes built into energy bills.
While wholesale prices are still a major influence, this time they were more stable, and it was the rise in system and policy costs that pushed the cap slightly higher.
Will gas prices go down in 2025 in the UK?
The gas unit rate under the cap actually fell a little from 6.33p/kWh (July–September 2025) to 6.29p/kWh (October–December 2025). However, a higher standing charge and changes in other parts of the energy system meant the overall cap rose by 2% in October.
There are no further updates this year, with the next change due January 2026. Many forecasts suggest a small drop in early 2026. The system operator also expects stable gas supplies this winter, which should keep prices steadier, though not necessarily cheaper.