The price cap limits what a supplier can charge for each unit of electricity and gas and is set by the Government.
- It only applies to default or standard tariffs, often known as standard variable tariffs and does not apply to fixed period tariffs.
- The cap applies regardless of your meter or payment type.
- The price cap doesn’t cap your total energy bill – because your total bill depends on how much energy you use. The more you use, the more you pay and vice versa.
- The price cap sets a maximum rate for each unit of electricity and gas, and the daily standing charge. It was introduced in 2019 to prevent people from being over charged for their energy - standard tariffs were traditionally more expensive than the markets cheapest deals and whilst some customers regularly changed suppliers or tariffs to get the best deal, a lot of customers were not able to.
- The price cap is linked to wholesale prices which are currently volatile due to a number of factors, the Russian invasion of Ukraine, shortage of gas supply etc.
In September 2022, the UK government announced the energy price cap will be frozen from 1st October 2022 for 2 years under the Energy Price Guarantee - however in October 2022, this has been updated and will be in place until April 2023. You can read more about the price cap and current price cap rates here (without the government support). To understand your rates with the current government support you should contact your energy supplier.