Energy Price Cap Reduction for Households

Ofgem News & Press Releases

Published April 1st, 2026

Detected March 13th, 2026

Summary

Ofgem announced that the energy price cap will fall by £117 (7%) for a typical household between April 1 and June 30, 2026. This reduction is attributed to the end of certain environmental and social scheme funding and a decrease in global wholesale energy prices, partially offset by increased network costs.

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What changed

Ofgem, the UK's energy regulator, has announced a reduction in the energy price cap, effective from April 1 to June 30, 2026. For a typical household paying by Direct Debit, this means a decrease of £117 (7%) in their annual energy costs, bringing the average annual bill to £1,641. This change is primarily driven by the cessation of funding for certain environmental and social schemes, which will now be covered by general taxation, and a decrease in global wholesale energy prices. However, network costs have risen due to investment in energy infrastructure.

While this announcement details a price reduction, regulated energy suppliers must ensure their default tariff charges align with the new cap rates for electricity and gas unit prices and standing charges. Consumers will see savings of approximately £10 per month. The document also notes that costs related to the Warm Home Discount scheme are transitioning from standing charges to unit rates. No specific compliance actions are required from regulated entities beyond adhering to the new cap, as this is a notification of an updated price level.

Source document (simplified)

Changes to energy price cap between 1 April and 30 June 2026

Publication type: News Publication date:

25 February 2026

Topic: Energy pricing rules Subtopic: Energy price cap Print this page

Energy price cap rates 1 April and 30 June 2026

Electricity rates

If you are on a standard variable tariff (default tariff) and pay for your electricity by Direct Debit, you will pay on average 24.67 pence per kilowatt hour (kWh). The daily standing charge is 57.21 pence per day. This is based on the average across England, Scotland and Wales and includes VAT at 5%.

Gas rates

If you are on a standard variable tariff (default tariff) and pay for your gas by Direct Debit, you will pay on average 5.74 pence per kilowatt hour (kWh). The daily standing charge is 29.09 pence per day. This is based on the average across England, Scotland and Wales and includes VAT at 5%.

Why energy prices are changing

The UK government recently announced that the funding for 2 environmental and social schemes will either end or be funded through general taxes from April 2026. Due to this change, customers will save an average of £150.

From April 2026, costs related to the Warm Home Discount will change from standing charges to the unit rate. Over the last 3 months, global wholesale energy prices have also gone down by £38 a year.

Network costs have increased by £66 a year because of the current price control framework (RIIO-3). The framework focuses on investment in upgrading energy infrastructure such as power and gas grids to help keep bills more stable in the future.

Costs included in the energy price cap

The level of the energy price cap is made up of different costs, for example the wholesale cost of gas and electricity, costs to supply energy on the network and VAT. These costs are split within the energy price cap between the unit rate and the standing charge.

We recently consulted on costs related to the Warm Home Discount scheme and its impact on how the cap is calculated. View all our latest consultations and decisions related to the energy price cap.

View and compare 1 April to 30 June 2026 and 1 January to 31 March 2026 energy price cap standing charges and unit rates by region.

Read about the costs that make up the standing charge for electricity and gas.

You can also get and compare all the energy price cap (default tariff) levels.

Read about typical household energy use and how the energy price cap is calculated on our Average gas and electricity usage page.

Managing your energy bills and tariff

You are covered by the energy price cap if you are on a default tariff and pay for your electricity and gas by:

standard credit (payment made when you get your electricity and gas bill)
Direct Debit
prepayment meter
Economy 7 (E7) meter The actual amount you pay will depend on how much energy your household uses, where you live and the type of meter you have.

You could pay less for your energy by changing your energy tariff or payment type. Find out if you can change or fix your tariff and how to switch energy supplier.

Tell your energy supplier if you cannot pay your bills. They must help you if you ask. They could set up a repayment plan or provide you with emergency credit.

What we are doing to help customers

We are introducing a lower standing charge tariff pilot which will start in April and last one year. The trial will give customers more choice, especially those who use less energy.

Customers who are with EDF, E.ON, Octopus and British Gas will be offered the new tariff if they meet the requirements.

Next energy price cap review

We review and set a level on how much an energy supplier can charge for each unit of energy including the standing charge every 3 months. The levels for the period 1 July to 30 September 2026 will be published by 27 May 2026. We may publish before this date if we need to because of external reasons.

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