What to Expect from the Energy Price Cap April 2026

Ofgem, the UK’s energy regulator, has confirmed a 7% drop in the Ofgem price cap from April 2026 — welcome news for households facing high energy costs.

The latest price cap announcement means a typical annual bill for an average household on a default tariff will fall to £1,641, a saving of £117 per year.

While this is good news, the cost of energy remains significantly higher than before 2022, and several other billing changes are happening at the same time.

Here’s what’s changing — and what it means for your electricity bills and gas costs.

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What Is the Ofgem Price Cap?

The Ofgem’s price cap limits the maximum suppliers can charge per unit of energy on standard variable tariffs (also called default tariffs).

It does not cap your total bill. Instead, it sets:

• Maximum unit prices (per kWh)
• Maximum daily standing charges

Your final bill depends on your energy use.

The cap is calculated using typical domestic consumption values, based on:

• 11,500 kWh of gas per year (average gas use)
• 2,700 kWh of electricity per year (average energy use)

These figures reflect an average household paying by direct debit with dual fuel.

The New April 2026 Price Cap Level

From April 2026, the new cap level is:

Gas

• 5.74p per unit of energy (kWh)
• 29.09p daily standing charge (a lower standing charge than before)

Electricity

• 24.67p per kWh
• 57.21p daily standing charge (slightly higher)

The electricity unit rate is down nearly 11%, while gas unit prices fall by around 3%.

The previous price cap (January–March 2026) was £1,758 for a typical household, so this marks a noticeable reduction.

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Why Are Energy Bills Falling?

The drop is largely due to government changes announced in the Autumn Budget.

Some costs previously included in bills — such as elements linked to the Energy Company Obligation (ECO) scheme and certain green levies — have been shifted away from energy bills and into general taxation.

However, not all costs are falling.

Energy bills include many different costs:

• Wholesale prices
• Energy network charges
• Environmental and green energy schemes
• Supplier operating costs
• Policy costs such as the Warm Home Discount

The wholesale cost of gas remains volatile, but relatively stable compared with the peaks seen during the Ukraine crisis.

Without the government intervention, analysts suggest the next price cap would have increased.

Check today’s fixed deals before the next price cap change

Payment Type Changes: Who Pays What?

The type of meter and payment method still makes a difference.

Direct Debit (Typical Average Household)

£1,641 per year

Prepayment Customers

Around £1,597 per year

Prepayment customers continue to benefit from reforms aimed at reducing unfair cost differences.

Paying on Receipt of Bill (Cash/Cheque)

Around £1,772 per year

If you’re on a prepayment meter or using less energy than average, your savings may differ.

Fixed Deals vs Default Tariffs

The price cap only applies to households on a default tariff.

Around 40% of homes are on fixed deals, which are not directly controlled by the cap level — although suppliers are expected to reflect policy cost reductions.

In some cases, fixed deals are now priced below the April cap level.

With wholesale prices stabilising, the energy market is becoming more competitive again, and switching activity is rising.

That means it may be worth reviewing your tariff rather than automatically staying on the price cap.

Standing Charges: What Else Is Changing?

Standing charges cover the cost of maintaining the energy network — including pipes, cables and system upgrades.

From April:

• Gas standing charges fall (17%)
• Electricity standing charges rise (4.5%)

The lower standing charge on gas partly reflects some costs moving into the unit rate instead.

For households using less energy, standing charges can make up a large proportion of the bill — so comparing both unit prices and standing charges is important.

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How This Compares to the Energy Price Guarantee

During the peak of the crisis, the government introduced the Energy Price Guarantee, which limited bills for a typical household to £2,380.

Although current electricity bills are far below that level, they are still roughly one-third higher than before 2022.

The cost of energy remains elevated compared with historic norms, even after this reduction.

Will Energy Prices Fall Again?

Price cap predictions suggest limited further falls in 2026.

While wholesale prices have eased, the wholesale cost of gas remains sensitive to global supply issues.

Energy companies must also recover network and operational costs, meaning large reductions are unlikely unless wholesale markets drop significantly.

Many analysts expect relative stability rather than dramatic change.

Other Energy Billing Changes to Be Aware Of

This update is not just about the price cap.

Other changes and ongoing factors include:

• Continued review of green levies
• Ongoing support through schemes such as the Warm Home Discount
• Greater enforcement powers for the energy regulator Ofgem
• Increased scrutiny of how energy companies pass savings to customers
• Efforts to reduce the gap between prepayment customers and direct debit customers

In addition, household debt to suppliers remains above £4bn — a sign that energy costs are still stretching many families.

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How Much Will You Actually Save?

Savings depend on:

• Your energy usage
• Your type of meter
• Your tariff type
• Whether you use more electricity or average gas levels
• Regional standing charges

Homes that use higher levels of electricity are likely to see the biggest benefit because electricity unit prices have fallen more sharply.

Those using less energy overall may notice a smaller monetary saving.

Should You Compare Energy Prices Now?

Even with the cap falling, staying on a standard variable tariff is not always the cheapest option.

You may benefit from switching if:

• Your fixed deal is ending
• You want price certainty
• You use more than average energy
• You’re currently on a default tariff

Comparing tariffs allows you to check:

• Unit prices
• Standing charges
• Contract length
• Exit fees
• Green energy options

With the energy market becoming more competitive again, reviewing your options could deliver further savings beyond the £117 cap reduction.

Review your options and find the right deal for your home

The Bottom Line

The April 2026 price cap announcement brings welcome relief after years of high electricity bills and gas costs.

But energy costs remain elevated, and the price cap is not necessarily the cheapest deal available.

Checking your tariff, understanding your energy usage, and comparing offers could help you secure better long-term value — especially as the energy market stabilises.

Correct as of 26 February 2026

FAQs About the Energy Price Cap April 2026