The British regulator OFGEM has announced changes to the maximum amount that energy suppliers can charge consumers on standard tariffs for each unit of energy consumed and for the daily standing charge. Every three months, the level of costs that the energy supplier can charge for each unit of energy supplied and the daily standing charge within the price cap for the standard tariff is reviewed and determined.
The specific tariffs (average for England, Scotland, and Wales, including 5% VAT) are:
For electricity, the average price is 24.67 pence/kWh and the daily standing charge is 57.21 pence. For natural gas, the average price is 5.74 pence/kWh and the daily standing charge is 29.09 pence.
Three main factors for price changes are indicated
- Government policy (savings of ~£150/year) – the funding of two environmental and social schemes (through energy bills) will either be discontinued or taken over by general tax revenues from April 2026. In addition, the costs associated with the Warm Home Discount scheme are being transferred from the standing charge to the unit price.
- Decline in wholesale market prices (savings of ~£38/year) – there has been a reduction in average wholesale energy prices over the last three months.
- Increase in network costs (+£66/year) Network costs are rising due to the current RIIO-3 price control framework, which is focused on investment in the modernization of energy infrastructure—electricity and gas networks—with the aim of stabilizing bills in the future.
In addition, Ofgem is launching a one-year pilot project for a tariff with a lower standing charge from April 2026, aimed at lower consumption customers. Customers of EDF, E.ON, Octopus, and British Gas will be able to take advantage of the pilot tariff if they meet certain conditions.
Costs included in the energy price cap
The level of the energy price cap consists of various costs, such as the wholesale price of gas and electricity, the cost of delivering energy through the grid, and VAT. These costs are distributed within the energy price cap between the unit price and the standing charge.
Latest consultations and decisions related to the energy price cap
Fixed charges and unit tariffs by region for the period from April 1 to June 30, 2026, and from January 1 to March 31, 2026.
Costs that make up the fixed charge for electricity and gas
Comparison of energy price cap levels (standard tariff).
The energy price cap applies to consumers who use the standard tariff and pay for electricity and gas through:
- standard credit note (payment made after receiving an electricity and gas bill)
- direct debit
- prepaid meter
- Economy 7 (E7) meter
The actual amount payable depends on the amount of energy used by the household, the location of consumption, and the type of meter installed.
It is possible to reduce energy bills if consumers choose to change their supplier and opt out of the protected standard tariff or change the way they pay for it, as there are differences. The standard tariff energy supplier also has an obligation to help consumers who are unable to pay their bills by providing them with a repayment plan or referring them to a partner credit institution for an emergency loan.
