Choosing an Energy Tariff: The Price Cap Explained
Last checked November 2026. Offers and rules change: confirm with the provider before you rely on them.
Most households are either on their supplier's standard variable tariff, where prices are limited by the energy price cap, or on a fixed tariff, where the prices are locked for a set time. Which is better for you depends on the prices on offer today, how much energy you use, and how much certainty you want.
What the price cap is
The energy price cap is set by Ofgem, the energy regulator for England, Scotland and Wales. It is reviewed every three months. It limits two things for customers on a standard variable tariff (the default tariff you are on if you have never chosen a deal, or if a fixed deal has ended):
- the unit rate — the price of each kilowatt hour (kWh) of gas or electricity; and
- the standing charge — a fixed daily charge for being connected.
At the time of writing (November 2026), Ofgem's cap for 1 October to 31 December 2026 works out at £1,723 a year for a typical household using both gas and electricity and paying by Direct Debit. The average capped rates for Direct Debit customers are 26.32p per kWh with a 54.83p daily standing charge for electricity, and 7.97p per kWh with a 29.68p daily standing charge for gas. Rates vary by region and by how you pay, and they are due to change again in January, so check the current figures on Ofgem's price cap page.
What the cap does not do
According to Ofgem, the cap also does not cover:
- fixed tariffs;
- heating oil, or homes on a heat network (see heating oil, LPG and off-grid homes);
- business energy contracts.
It does not apply in Northern Ireland, which has its own energy market, its own regulator (the Utility Regulator) and a smaller choice of suppliers. See over-60s in Northern Ireland.
Fixed or variable?
| Standard variable tariff | Fixed tariff | |
|---|---|---|
| Prices | Can go up or down every three months with the cap | Unit rates and standing charges locked for a set time, often 12 months or more |
| Protected by the price cap | Yes | No |
| Exit fees | None | Often, if you leave early: check before you sign |
| Suits | People who want freedom to leave at any time | People who want to know their rates in advance |
A fix is only good value if its rates are close to, or below, what you would otherwise pay over the same period, and nobody can know that for certain. What a fix does give you is certainty about the rates. Remember that "fixed" means the prices are fixed, not the bill: you still pay for what you use.
Standing charges and low users
If you use very little energy, the standing charge can be a large share of your bill. Some suppliers offer tariffs with a lower standing charge and a higher unit rate. These can suit a small, well-insulated flat, but can cost more for someone who is at home all day in winter. Work it out with your own annual usage, in kWh, from your bill. If you have a gas supply you never use, for example a gas meter in an all-electric home, ask your supplier about having the meter removed so that you stop paying a standing charge for it.
How you pay matters
- Direct Debit is usually the cheapest way to pay. Your supplier should set the amount fairly, based on your usage, and you can ask for a refund if a large credit builds up.
- Paying when the bill arrives, by cash, card or cheque, usually costs more. See paying bills without Direct Debit.
- Prepayment means paying before you use the energy. See our guide to prepayment meters.
How to compare and switch
- Find a recent bill or annual statement. Note the tariff name, your annual use in kWh for each fuel, and any exit fee.
- Use a price comparison site, the comparison tool on the Citizens Advice website, or phone suppliers directly. Our price comparison guide explains how comparison sites work and how they make their money.
- Compare unit rates and standing charges, not just an estimated monthly payment.
- Ask your current supplier what else it can offer. Existing customers are sometimes offered a deal that does not appear on comparison sites.
- If you switch, the new supplier does the work. Your supply is not cut off, no pipes or wires change, and you have a 14-day cooling-off period in which you can change your mind.
Before you switch, ask whether the new supplier takes part in the Warm Home Discount scheme if you rely on it. Once you have switched, ask the new supplier to add you to its Priority Services Register.
Common questions
Will the price cap protect me if I do nothing?
If you are on a standard variable tariff, yes: your rates cannot go above the cap. But the cap moves every three months, so your rates can still rise.
Can I switch if I owe my supplier money?
It depends on how long you have owed it and on the type of meter you have. Ask your supplier, or get free advice from Citizens Advice, before assuming you are stuck.
My fixed deal is ending. What happens?
Your supplier must write to you before it ends. If you do nothing, you are moved to its standard variable tariff, which is covered by the cap. The letter will tell you the date from which you can leave without paying an exit fee.