The most common myth about the energy price cap is that it limits your total bill, when in fact, it only caps the price per unit of energy and the standing charge - so your total costs still depend on the actual amount of energy you use. Learn more about the energy price cap here as we debunk the most common myths we’ve encountered.

What do I need to know about the energy price cap?

Navigating the UK energy market can often feel confusing.

Every three months, Ofgem, the energy regulator, announces the latest cap on how much suppliers can charge per kWh of energy. It also caps your standing charge, which is the fixed daily fee you pay to cover the costs of keeping your electricity and gas supply connected and maintained, even if you don’t use any energy.

These announcements are usually widely reported and discussed in the press, but there can still be some confusion for customers about what these numbers actually mean for the average household.

If you’re looking for clear answers, you’re in the right place. We’ve looked into the 7 most common energy price cap myths and misconceptions.

Myth 1: The price cap guarantees I will never pay more than the headline figure

When Ofgem announces the new price cap, consumers often assume this is the maximum they will have to pay for their energy across the year. This leads to a very common question: “is the price cap a limit on total bills?”

To explain the price cap accurately, it simply limits the cost of each unit of energy you consume, measured in pence per kilowatt-hour, or kWh, not your final total bill.

The headline figure broadcasted on the news is simply an average. It represents what a typical household paying by Direct Debit would pay over a year. Ofgem estimates this at 2,700 kWh of electricity and 11,500 kWh of gas per year, but your bills could be higher than this average.

For example, if you live in a large five-bedroom house with poor insulation and use your heating often, your bill could be higher than the headline figure.

Myth 2: The price cap covers every single energy tariff on the market

Another misconception is that Ofgem’s price cap applies universally to every energy tariff.

The price cap only applies to standard variable tariffs (SVTs), sometimes known as default tariffs. If you have signed up for a fixed tariff, the unit rate price agreed stays the same for the length of your contract, regardless of what Ofgem announces.

Understanding the difference between fixed rate and standard variable tariffs can help with household budgeting. A fixed rate offers peace of mind by protecting what you will pay per unit of energy.  If the price cap falls, a standard variable tariff could work out cheaper, but it can also work the other way - if the price cap goes up, you could save more on a fixed price tariff.

Myth 3: Changes in the wholesale energy market no longer affect domestic customers

Because Ofgem regulate the price cap, it’s easy to assume that global events don’t impact our domestic bills. However, it’s important to know how the energy price cap is calculated.

Ofgem decides the price cap by analysing the wholesale cost of gas and electricity over a specific "observation window" (usually a few months prior to the cap update).

When global wholesale prices spike due to geopolitical conflicts or supply chain disruptions, energy suppliers will likely have to pay more to secure energy, so Ofgem raises the price cap to ensure these suppliers can cover the costs of supplying energy, while also protecting customers.

Myth 4: Standing charges are not included in the price cap

When we talk about the UK energy price cap many people focus solely on the cost of gas and electricity. However, your energy bill is split into two distinct parts: the unit rate and standing charge.

The standing charge is a fixed daily fee you pay to cover the costs of keeping your electricity and gas supply connected and maintained, even if you don’t use any energy.

A common myth is that standing charges are unchecked and unregulated, but Ofgem actually caps both the unit rate and the standing charge.

Within the cap, your standing charge can vary depending on where you live. Ofgem calculates this based on:

Myth 5: Everyone pays exactly the same unit rates, regardless of their meter

This isn’t the case, as the type of meter you have in your home can mean that the price cap is applied slightly differently.

For example, if you have electric heating, your home may have a multi-rate meter. If you have a 2-rate meter with a separate day and night rate, you will have two distinct capped rates: a higher rate for daytime usage and a significantly cheaper rate for nighttime usage (usually a seven-hour block).

Myth 6: Energy prices will keep rising

When there’s disruption in the global energy market, it’s hard to predict how the price cap could change in the long term.  But the energy price cap doesn’t always go up - since the price cap was introduced in January 2019, there have been several decreases to the price cap (like in April 2026 and July 2025).

A better strategy is to calculate average energy use for UK households and benchmark your own energy use against it. According to Ofgem, a typical household uses roughly 2,700 kWh of electricity and 11,500 kWh of gas annually. By checking your annual statement and comparing your usage to these averages, you can see if you are consuming more than previous years, and where you could make adjustments.

Myth 7: There is nothing you can do to save money while on the price cap

The price cap only limits the unit rate you pay for your energy, but you can still lower your energy bills by making changes to how and when you use energy. You could also consider looking into a fixed price tariff, which may be cheaper than the current price cap. You can explore your tariff options in your online account.

Here are some effective ways to reduce your energy consumption:

Things to keep in mind

The UK energy market can be confusing, but understanding how it works can help protect you from unexpected bill shocks. The most important takeaway is to remember that the energy price cap is a cap on the cost of each unit of energy, but you’ll still pay more for your bills if you use more energy.

By understanding how the price cap works, checking what tariffs you’re eligible for, and reducing your energy use where you can, you can still take control of your energy bills, regardless of what the wholesale market is doing