Energy Price Cap Information 2024

The price cap between 1 July and 30 September 2024 has decreased by 7%. This means that the typical UK household will pay £1,568 per year for their energy.

Cornwall Insights estimates that the next price cap review in October 2024 will increase by 10% to £1,723.

Ofgem defines typical usage as 11,500 kWh annually. You will pay more if you use more as the cap is on the overall price the supplier can charge you per kWh, not the overall amount you pay.

Beat The Price Cap

latest energy price cap

Latest Energy Price Cap Announcements

Updated July 2024.

Energy Price Cap History

Period	Typical usage price cap (£)	% Change vs previous
October 2024 (prediction)	£1,723	+10%
July 2024	£1,568	-10%
April 2024	£1,690	-12%
January 2024	£1,928	+5.12%
October 2023	£1,834	-11.57%
July 2023	£2,074	-36.7%
April 2023	£3,280	-23.3%
January 2023	£4,279	+21.2%
October 2022	£3,529	+79%
April 2022	£1,971	+54.3%
January 2022	£1,277	0%
October 2021	£1,277	+12.2%
January 2021	£1,138	+9.2%
October 2020	£1,042	-7.4%
April 2020	£1,126	-4.5%
October 2019	£1,179	-6%
April 2019	£1,254	+10%
January 2019	£1,137	N/A (price cap started)

Price cap history is based on Ofgem's typical usage for direct debit customers.

What Is The Energy Price Cap?

Ofgem introduced the price cap in 2019 to ensure suppliers charge fair prices in line with wholesale costs. It restricts the amount suppliers can charge customers for each unit of gas and electricity used. If you use more energy, you will pay more for your energy. The price cap only applies to customers on a standard variable tariff.

How The Price Cap Is Calculated

The costs worked into the price cap include wholesale energy costs, network maintenance, government policies (e.g. cold weather payments etc), capped supplier profits and VAT.

Here’s a breakdown of the costs that are included in the price cap:

Wholesale costs - this is the cost of the gas and electricity from the grid.
Network/ operating costs - this covers all the costs of pipe and cable maintenance that delivers energy to UK households, including all operational costs associated with metering and billing.
Policy costs - this supports government initiatives and social schemes.
VAT - 5% is added to the price.
Supplier profits - this sits at around 2% of the bill under the price cap.
Payment method allowance - a slight variance in price to cover the costs of the payment method used.

The price cap is set at a different level for each payment method.

Compare deals

Who Are Ofgem?

Ofgem is an Independent National Regulatory Authority that is part of the UK government but operates independently from the government and the energy industry to regulate the UK energy market.

What Does Ofgem Do?

Ofgem aims to create a more competitive, fairer energy market in the UK. As part of this, they are trying to make it easier for energy users to switch suppliers and get a better energy deal. This includes ensuring customers have an energy supply that is value for money.

They are set up to protect the interests of energy customers in the UK, this includes:

Promoting value for money through the setting of revenue controls as well as the supervision of wholesale and retail markets.
Supporting the security of the energy supply and its sustainability which includes ensuring that there is enough energy available at all times, supporting the National Grid in managing supply, as well as promoting energy efficiency and demand management measures.
Promoting sustainability and the transition to a low-carbon economy which includes promoting energy-saving measures and demand-side response as well as supporting all environmental improvements.
Supervising and regulating the energy market and ensuring its competitiveness through reporting requirements, setting regulations, investigating any possible breaches that may occur, and monitoring licensing conditions.
Regulation and delivery of any energy-based government schemes which include the consumer and environmental programmes as well as the regulatory system for offshore electricity transmission networks.

Who Governs And Funds Ofgem?

Ofgem is governed by the Gas and Electricity Markets Authority (GEMA) which decides its strategy, policies, priorities, and regulatory decisions such as enforcement and price control.

Ofgem is funded by the companies that it regulates through an annual license fee which is set at a level to cover their costs. The license is set up in such a way that they remain independent from energy companies.

How To Complain To Ofgem

Ofgem does not have a direct role in dealing with complaints and will not get involved with individual complaints. Rather than deal with gas and electricity complaints, Ofgem set standards of customer service levels in regards to complaints and guidance on handling complaints that all energy companies must adhere to.

Citizens Advice and Energy Ombudsman services have been established and funded to handle complaints on behalf of Ofgem and the government.

Publishing quarterly domestic complaints data on their websites
Publishing their top five complaint reasons and the actions they are taking to reduce this
Clearer complaint handling procedures as a result of the Complaints Handling Standards Regulation 2008
Set reporting templates for complaints reporting to Ofgem

Ofgem alongside the Citizens Advice and the Energy Ombudsman publish industry complaint statistics by supplier, the severity of the complaint, the length of time to resolve the complaints, and how many complaints are upheld by the Energy Ombudsman.

Ofgem does not audit or check the complaints data but will intervene and conduct an investigation if the energy company is believed to have breached the Complaints Handling Standards Regulation 2008.

Price Cap By Payment Method

Payment Method	Direct Debit	Cash/ cheque	Pre-payment
Typical usage price cap	£1,568	£1,668	£1,522

The price cap by payment is based on typical usage set by Ofgem.

How Does Ofgem Calculate Typical Household Consumption?

Energy usage	House type	Typical electricity use (kWh)	Typical gas use (kWh)
Low	Flat / 1 bedroom house	1,800	7,500
Medium	2-3 bedroom house	2,700	11,500
High	4+ bedroom house	4,100	17,000

Source: Ofgem - Average gas and electricity usage

Are Standing Charges Capped?

Daily standing charges are not capped and they are set by the supplier to cover operational costs of supplying energy to your home. However, standing charges are included in the maximum price that a supplier can charge you.