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The UK Energy Price Cap, Explained With the Numbers
The energy price cap is usually reported as one yearly figure, £1,723 for October to December 2026. Almost nobody pays exactly that. What the cap really limits is two numbers on your bill, and with them you can work out your own cost to the penny.
7 min read · updated 6 October 2026 · links to 7 tools
In short
Ofgem's energy price cap does not limit your total bill. It caps two things: the price per kilowatt-hour of energy you use, and the daily standing charge you pay whether or not you use any. From 1 October to 31 December 2026, for a Direct Debit customer, the average cap in Great Britain is 26.32p per kWh for electricity with a standing charge of 54.83p a day, and 7.97p per kWh for gas with 29.68p a day. Ofgem's yearly figure of £1,723 is what a household with typical use would pay over a year at those rates. There is no VAT on electricity from 1 October 2026 to 31 March 2027, so the electricity figures include none; gas prices include VAT. Rates differ by region and by how you pay. Your bill is the kWh you use times the unit rate, plus the number of days times the standing charge.
The four numbers that make up a capped bill
These are Ofgem's average figures for Great Britain for a Direct Debit customer, for 1 October to 31 December 2026. Your own figures depend on your region and how you pay, and are printed on your bill.
| Unit rate | Standing charge | Standing charge over a year | |
|---|---|---|---|
| Electricity | 26.32p per kWh | 54.83p per day | £200.13 |
| Gas | 7.97p per kWh | 29.68p per day | £108.33 |
There is no VAT on electricity from 1 October 2026 to 31 March 2027, so the electricity rates above include none. Ofgem's gas rates include VAT.
What the standing charge means
The standing charge is a fixed daily amount that covers the cost of supplying your home whether you use energy or not. At 54.83p a day, electricity costs £200.13 a year before a single kilowatt-hour is used; gas adds £108.33. A home that keeps both supplies connected pays £308.46 a year in standing charges alone.
This is why low-use households see a bigger share of their bill go on standing charges. At 2,000 kWh of electricity a year, the standing charge is about 28% of the electricity bill; at 4,000 kWh it is about 16%.
Turning the cap into your own bill
The arithmetic is the same for every household: multiply the kilowatt-hours you use by the unit rate, then add the number of days multiplied by the standing charge. Your annual use is on your bill or in your supplier's app.
| Electricity used in a year | Energy at 26.32p/kWh | Standing charge | Total for the year |
|---|---|---|---|
| 1,000 kWh | £263.20 | £200.13 | £463.33 |
| 2,000 kWh | £526.40 | £200.13 | £726.53 |
| 3,000 kWh | £789.60 | £200.13 | £989.73 |
| 4,000 kWh | £1,052.80 | £200.13 | £1,252.93 |
These use one rate for a full year to show the method. The cap changes every three months, so a real year is made of four periods at different rates.
What an appliance actually costs
Running costs come from the unit rate alone, because the standing charge is paid anyway. An appliance's energy use is its power in kilowatts times the hours it runs: a 3 kW kettle boiling for three minutes uses 0.15 kWh, which costs about 3.9p at 26.32p per kWh. A 1.5 kW heater running for four hours uses 6 kWh, about £1.58.
The electricity bill calculator does this for any appliance's wattage and hours, by day, month and year. For an air conditioner, the AC running cost calculator accounts for the way it cycles, and the EV charging cost calculator works out a car charge.
Gas is billed in kilowatt-hours too
Gas meters measure volume, but suppliers convert the reading to kilowatt-hours before applying the unit rate, so gas and electricity are compared in the same unit. At the October to December 2026 cap a kilowatt-hour of gas costs 7.97p against 26.32p for electricity, about a third of the price, which is why the comparison between gas and electric heating depends on how efficiently each turns energy into heat.
Older figures quoted in therms convert at a fixed factor; the therm to kilowatt-hour converter does it.
Where the cap stops
- It is not a cap on your bill. Use more and you pay more; only the rates are capped.
- It changes every three months. These figures apply from 1 October to 31 December 2026.
- It varies by region and payment method. Prepayment and standard credit customers have different rates from Direct Debit customers.
- It applies to standard variable tariffs. A fixed-rate deal has its own rates, set when you signed up.
- It covers England, Scotland and Wales. Northern Ireland has a separate energy market.
Frequently asked questions
What is the energy price cap from October 2026?
From 1 October to 31 December 2026, Ofgem's average cap for a Direct Debit customer is 26.32p per kWh for electricity with a 54.83p daily standing charge, and 7.97p per kWh for gas with a 29.68p daily standing charge. Ofgem puts the typical yearly cost at £1,723.
Is there VAT on electricity in the UK now?
Ofgem states there is no VAT on electricity from 1 October 2026 to 31 March 2027. Gas prices under the cap include VAT.
What is a standing charge?
A fixed daily charge for being connected to the supply, paid whether or not you use any energy. At 54.83p a day, electricity's standing charge comes to £200.13 a year.
Does the price cap limit my total bill?
No. It limits the unit rate and the standing charge. Your total depends on how much energy you use.
How do I calculate my electricity bill?
Multiply the kilowatt-hours you used by the unit rate, then add the number of days multiplied by the daily standing charge. At the October 2026 cap, 2,000 kWh over a year comes to about £726.53.
How much does it cost to boil a kettle?
A 3 kW kettle running for three minutes uses 0.15 kWh, about 3.9p at 26.32p per kWh.
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