Ofgem's energy price cap.

Ofgem's price cap.

On 23 February 2024, Ofgem announced that the energy price cap, for a typical household who use electricity and gas and pay by Direct Debit, would be £1,690 from 1 April 2024. This figure uses Ofgem’s new definition of ‘average energy use’ known as the Typical Domestic Consumption Values (TDCV). Ofgem sets the maximum amount that suppliers can charge for each unit of electricity and gas but not the total bill, so if you use more, you will pay more.

Ofgem’s energy price cap sets a maximum unit price for each kilowatt hour of energy used by customers on a standard variable tariff (SVT). The specific unit rates each customer sees will vary by region and payment type.

From 1 April 2024 Ofgem says that the average unit price per kilowatt hour (KWh) for customers on the default tariff (SVT) will be 24.50p for electricity and 6.04p for gas. Ofgem has changed the daily standing charge to 60.10p for electricity and 31.43p for gas. Standing charges vary by supplier, where you live, how you pay and what meter you have.

The energy price cap applies to customers on a SVT. If you’re on a fixed tariff, the price cap won’t affect you. You can log in to your account and see which tariff you're on. Did you know that we have a tariff with prices that stay below the energy price cap? Our Next Pledge tariff costs less per unit than the price cap unit rate, whether it goes up or down. With our Next Pledge tariff you’ll get energy prices guaranteed to stay £50 below the Ofgem price cap. T&Cs apply. Get a quote today.

Switch to Next Pledge.

With our Next Pledge tariff, you’ll get energy prices guaranteed to stay £50 below the Ofgem price cap. T&Cs apply. Unlike other fixed tariffs, you’ll also benefit if energy prices drop.

Note: Your energy rates will change whenever there’s a price cap review and your bills will vary depending on your usage.

Switch to Next Pledge

The next energy price cap review is in May and will be effective from 1 July 2024.

Ofgem has changed their definition of ‘average energy use’. Ofgem’s old definition of average energy use, known as the Typical Domestic Consumption Values (TDCV) has changed to more closely reflect the current average energy use. Typical annual household consumption is now estimated to be 2,700 kWh a year for electricity, and 11,500 kWh a year for gas. Learn more about Ofgem’s average electricity and gas usage.

What the energy price cap means for customers.

Standard variable tariff (SVT) customers.

Customers on a standard variable tariff (SVT) will see their unit prices fall to be in line with those set by Ofgem from 1 April 2024.

The specific unit rates each customer sees will vary by region and payment type. This is to reflect the different costs to suppliers of providing energy to homes and servicing the different payment methods. The regional variations for electricity, and payment type variations, have been adjusted by Ofgem in the most recent price cap calculations (23 February 2024).

We will adjust standard variable tariffs automatically. Customers on standard variable tariffs do not need to take any action.

Fixed tariff customers.

Fixed tariff customers will remain at the prices they agreed when they took their contract out. Fixed customers do have the option to switch to the Next Flex tariff.

Prepayment meter customers.

For prepayment meter customers, Ofgem's energy price cap will be applied to the price you pay for each unit of energy. The unit price varies regionally, by payment method and depends on the time of day that the energy is used but the new unit prices will fall in line with the price cap from 1 April 2024.

All customers will see a decrease in their unit prices from 1 April 2024.

On 15 March 2023 the Chancellor announced in the Spring Budget that people using prepayment meters will receive additional support from 1 July 2023 to bring their bills in line with people who pay by Direct Debit. This means that from 1 July a typical customer on a prepayment meter will pay the same amount as an equivalent customer paying by Direct Debit until 31 March 2024. This government support ends on 31 March 2024.

On 23 February 2024 Ofgem announced that they will maintain the PPM support from 1 April 2024. Ofgem also confirmed plans to maintain the equalisation of standing charges across payment methods so that customers are not charged more depending on the payment method they use. Since October 2022 the so-called ‘PPM premium’ was removed by government support via the Energy Price Guarantee. However, with that support coming to an end on 31 March 2024, Ofgem has taken steps to provide a lasting solution, which must be funded by bill payers rather than taxpayers, to maintain fairness in the system.

From 1 July to 30 September 2023, the Energy Price Guarantee prepayment meter discount will be applied to gas unit rates only, as the combined unit rate and standing charge for electricity prepayment meters will already be less than the equivalent for Direct Debit. The gas unit rate discount will therefore be (excluding VAT):

• 0.249p/kWh for gas from July to September 2023.

The specific prepayment meter unit rate each customer sees will vary by region. See the full list for July-September 2023.

From 1 October to 31 December 2023, the Energy Price Guarantee prepayment discount will be applied to standing charges. The standing charge discount will be applied to both electricity and gas tariffs:

• 4.5372p for electricity from October to December 2023

• 5.9432p for gas from October to December 2023

The specific prepayment standing charges each customer sees will vary by region. See the full list for October to December 2023.

From 1 January to 31 March 2024, the Energy Price Guarantee prepayment discount will be applied to standing charges. The standing charge discount will be applied to both electricity and gas tariffs:

• 4.5083p for electricity from January to March 2024

• 6.7565p for gas from January to March 2024

The specific prepayment standing charges each customer sees will vary by region. The discount will be applied automatically to the price that is set on the meter. You do not need to contact your supplier to apply or use vouchers.

Standing charges.

Ofgem’s energy price cap will see unit prices falling and standing charges changing. The specific unit rates and standing charge each customer sees will vary by region and payment type.

Energy Price Guarantee.

The government's Energy Price Guarantee ended on 31 March 2024. The price cap determines how much energy companies can charge and not the government's Energy Price Guarantee (EPG). From 1 April 2024 prices will be solely determined by Ofgem's price cap as the government's EPG is no longer available. From 1 October 2022 until 30 June 2023 the government supplemented what customers paid for energy which meant that a typical household saw an annual bill of £2,500.

​​​​​​​Customers still paid for the gas and electricity they used. But the government's Energy Price Guarantee limited the price that we could charge for each unit of energy. The scheme didn't cap your bill at £2,500, your bill amount was still based on how much energy you used. Visit our dedicated Energy Price Guarantee page for full information on how the EPG affects customers. With Ofgem’s price cap dropping below the government’s EPG from 1 July (£2,074 announced 25 May 2023), it effectively ended the government’s financial support for residential energy customers. Customer’s prices are now determined by Ofgem’s price cap. The government says the EPG will remain in place until 31 March 2024 but the threshold rose to £3,000 from 1 July 2023.

What is the price cap?

The price cap was introduced by the government in 2019 as backstop protection for customers who are on an energy tariff with standard variable rates. Electricity and gas prices are reviewed and updated by the energy regulator Ofgem.

The price cap is calculated and set by Ofgem to reflect changes in industry costs and the graph below shows how these have changed since the last review. The price cap level is set for customers in England, Wales and Scotland. Retail energy prices in Northern Ireland are not subject to a cap. Ofgem review the price cap every three months.

How the Energy Bills Support Scheme worked.

This government scheme has ended. In May 2022 the government announced several support measures to help households with rising energy bills. The main measure was £400 off electricity bills for domestic customers across England, Wales and Scotland. Known as the Energy Bills Support Scheme (EBSS) this money was credited to customers accounts from 1 October 2022. This money does not need to be paid back. There’s more information on our dedicated Energy Bills Support Scheme webpage.

Customers saw a discount of £66 applied to their energy bills in October and November, and £67 a month from December to March 2023. The scheme ended on 31 March 2023.

Customers received the money differently, depending on how you pay for your fuel now:

• Fixed Direct Debit customers received the money automatically as a deduction to their monthly Direct Debit.

• Pay on receipt of bill customers and regular cash payment customers saw the money automatically applied as a credit to their energy accounts in the first week of each month. This showed as a credit in the payments section of their monthly bill.

• Smart prepayment customers saw the money credited directly to their meters as a top up in the first week of each month.

• Traditional prepayment customers were provided with vouchers usually by the middle of each month. Customers needed to redeem these at their usual top-up point in a similar way to the Warm Home Discount by 30 June 2023.

What other measures are there? 

• A £900 payment will be made to more than eight million low-income households who receive Universal Credit, tax credits, pension credit and other means-tested benefits. This is an increase from £650 for the last year. The first payment of £301 will be made in the spring, £300 in the autumn and a final £299 in the spring of 2024.

• 6 million households with disabilities will receive a £150 cost of living payment in the summer (same as 2022).

• 8 million pensioner households will receive £300 (same as 2022) during the winter of 2023-24.

The above measures announced by the government are for the tax year 2023-24 were announced in the Autumn Statement (17 November 2022). These took effect on 5 April 2023.

In the Autumn Statement on 22 November 2023 the Chancellor announced that benefits will increase from 6 April 2024 by 6.7%, the inflation rate for September 2023. This applies to working-age benefits such as means-tested benefits such as Universal Credit, and disability benefits.

Am I affected by the price cap?

The price cap applies to you if you're on one of our standard variable tariffs. Between October 2022 and June 2023 residential customers were protected from the price cap rises by the government’s Energy Price Guarantee (EPG). The government's EPG will end on 31 March 2024, so from 1 April 2024 prices are determined by Ofgem’s price cap.

What support is available for E.ON Next customers?

This is a worrying time for everyone as the cost of living remains high. We understand that you may be struggling to pay and have a number of resources to help. 

How can I get help from you with making this decision?

We recommend checking your tariff online at the end of the month once any new prices have been set and waiting to contact us until then.

You can get advice from our Energy Specialists on social media at Facebook, X (Twitter) and WhatsApp. Our E.ON Next Community is also a great place to find support from other E.ON Next customers. 

More of your price cap FAQ.

You’ll find more answers in our FAQ below which our Energy Specialists regularly update to help support our customers. You can also stay up to date by following us on Facebook and Twitter.

Next Pledge tariff can provide up to £50 savings, applied as a reduction on unit rates split across both electricity and gas (£25 saving per fuel) based on an Ofgem typical medium usage. Next Pledge is a 12 month fixed term tariff with prices changing to stay below price cap every three months. Requires payment by Direct Debit and a Smart meter installation where possible. There are no exit fees with this tariff.