Energy price cap to save 11 million households up to £120 each from January

Regulator Ofgem has set the final level of the cap at £1,137 per year for a typical dual fuel customer paying by direct debit.

When the price cap comes into force at midnight on January 1, suppliers will have to cut the price of their default tariffs, including standard variable tariffs, to the level of or below the cap, forcing them to scrap extra charges.

The new cap will save the average household around £76, with a typical customer on the most expensive tariffs saving £120.

But the total savings for individual customers will depend on how much energy they use, the price of their current tariff, whether they have both gas and electricity and how they pay for their energy.

In total, the price cap will help around 11 million households in Britain to save around £1billion, according to Ofgem.

Dermot Nolan, chief executive of Ofgem, said: “The price cap will ensure that whether energy costs rise or fall suppliers are not feathering their nest and changes in energy prices will reflect the underlying costs to heat and light our homes.

“Consumers who want to cut their bills further should shop around for a better energy deal and while the cap is in place, we will continue our work to make this as easy as possible.”

By switching from a default tariff offered by the Big Six energy suppliers to the cheapest deal on the market, customers can save up to £285, according to government figures.


  • Use a comparison website: Customers can you use websites such as or to compare tariffs and find a cheaper deal. You could save up to £400 a year if you’ve never switched before.
  • There are other service you can turn to: MoneySavingExpert’s Cheap Enegy Club will let you set up an email reminder that alerts you when cheaper deals become available.
  • Things to do before you switch: Compare prices and before you switch check to see if you can get cachback from a website like Quidco or TopCashback

Energy and Clean Growth Minister Claire Perry said: “In the past few months loyal energy customers have continued to be hit by unjustified price rises on their already rip-off tariffs.

“This Government has delivered on time its promise to protect 11 million households from poor value deals this winter.

"Today’s final cap level brings greater fairness to energy prices and puts consumers at the heart of the energy market.”

Also commenting on the news of the price cap, Gillian Guy, chief executive of Citizens Advice, said:

“This price cap will finally offer some much needed protection for loyal households on default tariffs, who have been exploited for too long.

“While the cap will mean that people pay a fairer price, it will not be the best deal on the market.

"By shopping around and changing tariff or supplier, people are likely to be able to make much greater savings on their energy bills.

“Households may also be able to reduce their bills and make long-term savings by improving the energy efficiency of their homes. Simple steps, such as better insulation or heating controls, are a good place to start.”

The price cap is a cap per unit of gas and electricity, with standing charges taken into account.

In other words, it's not a cap on customers’ energy bills, which will still rise or fall in line with their energy consumption.

With the nights drawing in and the weather starting to get colder, here are 19 tips on how to cut your energy bills and how to make the most of your tariff.

Insulating your home is one of the most effective ways to cut the bills, and some customers can even get it done for free.

Meanwhile, many Britons wrongly believe light bulbs have little or no impact on their bills.

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