Changes to energy price cap from 1 January 2024
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Every three months we review and set a level on how much an energy supplier can charge for each unit of energy.
From 1 January 2024 the price for energy a typical household who use gas and electricity and pay by Direct Debit will go up by £94. This will take the price cap from £1,834 to £1,928 per year.
From 1 January 2024, for a typical user paying by direct debit, the unit rate will be 29p/kWh for electricity and 7p/kWh for gas. The average daily standing charge will be 53 p/day for electricity and 30 p/day for gas.
The increase in the price cap is because the cost of wholesale gas has gone up in recent months. This is due to world events including the conflict in the Middle East.
You can read about typical household energy use and how the price cap is calculated on our Average gas and electricity use explained page.
Costs included in the energy price cap
The level of the energy price cap is made up of different costs, for example the wholesale cost of gas and electricity, costs to supply energy on the network and VAT. These costs are split within the price cap between the unit rate and the standing charge.
View the price cap levels for 1 January to 31 March 2024 and compare with 1 October to 31 December 2023.
You can also read the background about the price cap policy.
Lowering the price difference between the ways that you can pay your energy bills
Historically, people on prepayment meters have paid higher standing charges than Direct Debit customers. This is because it costs energy suppliers more to serve prepayment meter customers. The government is currently subsidising prepayment meter customers through the Energy Price Guarantee, to ensure that they pay no more for their energy than Direct Debit customers, but this support is due to expire at the end of March 2024.
We have today published proposals for how to balance standing charges across different payment methods when government support through the Energy Price Guarantee ends.
We also want to make the allowance for debt-related costs in the price cap the same for people who pay for the energy they use by standard credit as those who pay by Direct Debit. These costs are included in the unit rate for each unit of energy you use. Tell us about your views on our proposed changes to prepayment meter standing charges and other debt costs.