What is the energy price cap | Switch to ScottishPower

What is the energy price cap?

On 26th August 2026 Ofgem announced that energy prices will go up by around £60¹ when the new price cap comes into effect on 1st October 2026. This means a typical¹ dual fuel household paying by Direct Debit will see their prices go up to around £1,723² a year.

At the same time, the UK Government is also reducing VAT on electricity from 5% to 0% from 1st October 2026. The typical cost shown above already reflects this change. While the VAT reduction will help lower electricity bills, the amount you pay will still depend on how much energy you use and the prices you pay.

The energy price cap is set by Ofgem. It limits how much suppliers in Great Britain (including Scotland) can charge for each unit of gas and electricity, plus the daily standing charge. It doesn’t cap your total bill. What you pay still depends on how much energy you use.

Latest energy price cap update (1st October 2026)

What this means:

Your unit prices will go up
What you pay depends on how much energy you use

Understanding the energy price cap

You’ve probably heard the term energy price cap a lot by now. But one of the biggest misunderstandings is the price cap is not a limit on your total bill.

Instead, it sets a maximum amount suppliers can charge for:

Each unit of gas and electricity (kWh)
The daily standing charge

Your bill still depends on how much energy you use.

A simple way to think about it

Think of it like charging your electric vehicle (EV) or filling up your car. There’s a price per unit (like the cost per charge or cost per litre). But the more you use, the more you pay. So even with a price cap, your total cost can still go up if you use more energy.

Important to know

The price cap only applies to standard variable tariffs
It does not limit your total bill
What you pay still depends on how much energy you use
The price cap sets the maximum price per unit, not your overall spend.

Unit rate vs standing charge

These are the two main parts of your bill.

Unit rate (what you use)

The price for each unit of energy
Energy is measured in kilowatt hours (kWh)
The more you use, the more you pay
The price per unit is limited by the price cap

Standing charge (daily cost)

A fixed daily charge, also known as a standing charge
This helps cover the cost of supplying energy to your home, including maintaining pipes, wires and meters
You pay this even if you don’t use any energy

Standard variable price vs fixed price tariffs

How the energy price cap affects what you pay

Understanding your energy tariff can help you stay in control of your costs. Here’s a simple guide to the two most common types – and how the price cap fits in.

What is a standard (variable) tariff?

A standard variable tariff (SVT) is a flexible option with no fixed end date.

Your unit rate (price per kWh) and standing charge can change
Prices go up or down over time

Most customers move onto a standard tariff when:

their fixed deal ends, or
they haven’t chosen a new tariff

What is a fixed price tariff?

A fixed price tariff locks your prices in for a set period, often between one and two years.

Your price per unit and daily standing charge stay the same during the contract
You’re protected if energy prices go up
You may pay an exit fee if you leave early

Which option might suit you?

Choose a standard variable tariff if you want flexibility and no exit fees for leaving your supplier
Choose a fixed price tariff if you want predictable monthly costs

Should you fix your prices?

By choosing a fixed price tariff you can protect yourself against future price cap increases. If you choose a fixed tariff with us at ScottishPower and the price cap is a decrease. You’ll be able to switch tariffs with us without paying exit fees, if a cheaper fixed price tariff becomes available to you.

Why the energy price cap changes

The energy price cap is not fixed. Ofgem reviews it every three months to reflect changes in the energy market.

What Ofgem looks at

When setting the price cap, Ofgem considers:

Wholesale energy costs (the price suppliers pay for gas and electricity)
Network costs (running and maintaining pipes and wires)
Supplier costs (billing, customer service, and operations)
Government and environmental schemes

Why prices can change

The United Kingdom relies heavily on gas. This means global market changes can affect energy prices here.

For example, prices may change due to:

shifts in global supply and demand
weather patterns
international events affecting gas supply

There’s more information about energy prices in our Support Centre.

What does the latest price cap mean for you?

For most customers in Scotland and across Great Britain that are on SVT:

You could see higher unit rates from October 2026
Your overall bill depends on your energy use
Summer bills could typically be lower due to you using less heating, than in winter

How to manage your energy costs

The price cap helps limit how much suppliers can charge per unit. But the biggest factor in your bill is how much energy you use.

Start with simple changes:

Turn down your boiler flow temperature
Bleed your radiators so heat spreads evenly
Draught‑proof doors and windows to keep warm air in
Switch to LED bulbs, which use less electricity

These small steps can reduce your energy use without affecting comfort.

Why this makes a difference

These changes help you use less energy while keeping your home comfortable.

Lower energy use means lower costs over time
Even small changes can add up across the year

If you need extra support

If you’re struggling to pay your energy bill, we recommend you contact us as soon as possible. We’ll then do everything in our power to help you manage your energy debt and avoid it building up. There’s more information in our support centre about what support is available.

Looking for other ways to stay in control of your energy costs?

There are also simple things you can do to help manage your account and energy costs:

Send regular meter readings to keep your bills accurate
Track your energy use in your online account using our Energy Insights³ tool
Check if another tariff could suit you better
Join Power Saver⁴ and make the most of cheaper electricity⁵

Frequently asked questions

No. The energy price cap limits the maximum price you can be charged for each unit of gas and electricity on a standard variable tariff. It does not cap your total bill. Your bill is made up of two parts: a fixed daily standing charge, which you pay even if you don’t use any energy, and the cost of the energy you use, charged at the unit rate. This means that the more energy you use, the more you’ll pay, even when the price cap is in place.

The unit rate is what you pay for the energy you use, and the standing charge is a daily fixed cost. You can find these on your bill.

The unit rate is the price you pay for each unit of energy you use, measured in kilowatt hours (kWh). The standing charge is a fixed daily fee that covers the cost of being connected to the energy network and maintaining the service. You can find both of these clearly shown on your bill or in your online account.

Because energy is bought and sold on global markets. Energy suppliers buy gas and electricity in advance from international wholesale markets. When global prices rise, it costs more for suppliers to buy energy, and this can feed through to customer prices. Ofgem reviews the price cap every three months using a set formula that reflects these costs. This helps avoid constant changes, but still allows prices to go up when costs rise and come down when they fall.

A typical household, paying by Direct Debit, that uses 2,500 units (kWh) of electricity (single rate meter) and 9,500 units (kWh) of gas a year.

The £60 yearly increase is based on the difference between Ofgem’s price cap for 1st July 2026 (£1,663) and the new price cap from 1st October 2026 (£1,723). The change to what you pay every month will depend on how much energy you use.

The Energy Insights tool is free for ScottishPower smart meter customers who choose the option for the meter to send us half-hourly readings. We may charge for Energy Insights in the future. Eligibility rules and terms apply, excludes PAYG customers with prepayment meters. Find out more here.

You’ll pay your normal electricity unit rate and daily standing charge initially. We’ll then give you the savings you’ve earned during your chosen slots, either by taking them off a later bill or, for Pay As You Go customers, by adding them to your meter. Each day is split into hourly slots, offering either half-price or 20% off your electricity. Each week you can choose from 98 hours of half-price slots and 50 hours of 20%-off slots. The savings you receive are based on the rating of your chosen slots (before VAT). VAT is worked out on your electricity charges before your Power Saver savings are applied. You’ll need a smart meter that sends half-hourly readings to take part in Power Saver events. Eligibility criteria, exclusions, and T&Cs apply.

Our Power Saver Offer events are part of our Power Saver service. To take part in Power Saver, you must be an electricity customer with an online account and a communicating smart meter, and you must choose to let the meter send us half-hourly readings. Exclusions apply. See Power Saver Offer Terms and Conditions.

Last updated: 26 August 2026