Energy price cap
Ofgem’s energy price cap limits what you pay for gas or electricity on a variable rate plan. Find out how it works – and how it affects your prices.
October price changes
The way energy suppliers set prices is impacted by:
- The price cap – set by Ofgem, the energy regulator. This limits the amount customers on variable rate plans will pay for each unit of gas and electricity and sets a maximum standing charge.
- The Energy Price Guarantee – provided by the government to help households with energy costs. It’s a discount on gas and electricity prices and is in addition to the price cap. It applies to both variable and fixed rate plans.
Ofgem have announced that the new price cap will be £1,834 for a typical household¹ from 1 October until 31 December 2023.
Although the cost of standing charge has gone up for Pay Monthly customers, we’re not passing this increase onto any of our customers. The cost of living crisis is impacting so many people, so it’s important to us that we protect our customers from price increases where we can.
The Energy Price Guarantee (EPG) level will remain at £3,000 for pay monthly customers. Pay As You Go customers will receive an additional EPG discount on their gas and electricity standing charges from 1 October - making their new price £1,816.90 per year for a typical household².
What this means if you pay monthly for your energy
If you're on a variable rate plan
If you're on a variable-rate plan we’re not passing on any standing charge increases. With the new price cap, you’ll pay a lower unit rate for your energy from 1 October. Daily standing charges should be increasing, due to rising costs of supplying energy to your home. Due to the challenges that a lot of customers face with the cost of living crisis, this increase won’t be passed on to you, and you’ll continue paying your current price for standing charge. Your actual bills will still depend on how much energy your home uses.
As the Energy Price Guarantee (EPG) level is higher than the new price cap, it won't have an impact on what you pay if you're on a variable-rate plan, but it will remain in place to protect you from future price increases.
If you're on a fixed rate plan
The price cap doesn't affect prices for fixed-rate plans. Even though the EPG level went up to £3,000 from 1 July 2023, if you're on a fixed-rate plan your prices won't change. That's because we're keeping your prices as they are for the length of your contract to protect you from any price increases.
What this means if you Pay As You Go for your energy
All Pay As You Go prices are variable – these will be set by the new price cap on 1 October 2023. As of 1 October 2023, you’ll receive an additional discount on your gas and electricity standing charges through the Energy Price Guarantee (EPG). This is so that you’ll most likely pay no more than Pay Monthly customers.
This means your prices will decrease on 1 October.
Now's the time to send a meter reading
This will make sure your energy account is up to date. You can submit a meter reading now on your online account or through our app.
If you’ve got a smart meter, you don’t need to send a reading. The smart meter will send this for you.
There’s still support available
Although prices are starting to come down, we know it won’t be enough for everyone. We understand this is a worrying time, and we’re here to support you.
OVO’s Customer Support Package still offers specialist help to customers – including financial relief and guidance.
Priority Services Register
Need extra support? We can offer free help if you’re ill, have a disability or have a medical condition.
Questions and answers
The price cap limits the amount customers will pay for each unit of gas and electricity and sets a maximum standing charge. The cap is set by Ofgem (the energy regulator) and determined by the price of wholesale energy. It’s reviewed 4 times a year, with changes coming into effect in January, April, July and October.
The government’s Energy Price Guarantee (EPG) was introduced in October 2022 to help households with rising energy costs. It’s a discount on the unit rate of gas and electricity and is on top of the price cap. The EPG was set at £2,500 for a typical household bill. From 1 July 2023 this changed to £3,000 for pay monthly customers, which is above the price cap.
Pay As You Go customers will receive an additional EPG discount on their gas and electricity standing charges from 1 October 2023.
As of 1 October 2023, the Energy Price Guarantee will be applied to Pay As You Go tariffs to provide a discount on customers’ gas and electricity standing charges.
Previously the discount was only applied to unit rates (the amount you pay per kWh).
The standing charge is a fixed daily charge that goes towards the cost of supplying energy to your home. It’s like line rental for broadband. You pay your standing charge no matter how much energy you use.
The price of standing charge is increasing for Pay Monthly customers, due to rising costs of supplying energy to customers’ homes. Due to the challenges that a lot of customers still face with the cost of living crisis, we’re not passing this increase onto you, so you’ll continue paying your current price for standing charge.
If you were on a fixed-rate plan between October 2022 and July 2023, we’ll honour your lower Energy Price Guarantee (EPG) rates until your plan comes to an end. This is at the EPG level of £2,500, despite it changing to £3,000 from 1 July 2023.
If you'd like to switch to a variable plan, just give us a call. Just so you know – you might need to pay exit fees if you choose to end your plan early.
Yes. Choose a fixed rate plan and your rates will stay the same until the end of your contract.
For our latest prices, and to see if you could save, check your online account.
If you're on a fixed rate plan, there'll be no change to the price you're paying right now.
If you'd like to switch to a variable rate plan, just give us a call. Just so you know – you might need to pay exit fees if you choose to end your plan early.
We've put together a guide covering tips to help you save energy and money.
Our priority right now is making sure you have as much support as possible through this challenging period.
Due to the challenges that a lot of customers still face with the cost of living crisis, we’re not passing the Pay Monthly standing charge price increase onto our customers, so you’ll continue paying your current price for standing charge.
We launched our Customer Support Package in October 2022, which has already helped tens of thousands of customers.
We’re working closely with StepChange, the debt charity, to support customers who need to closely assess their finances and may require help in challenging situations. That’s why we donated £2 million to them to help continue offering the vital support they provide.
If you’re concerned about topping up or paying your energy bill, contact us as soon as possible.
We’re here to help, and our teams will be able to talk you through your options and advise on what might work best for you.
We’ve supported lots of people in similar situations – and we can support you too. The sooner you speak to us, the easier it will be to talk you through what support and advice is available.
Let us know if:
- Your financial circumstances have changed
- You’re elderly, have a disability or long-term illness
We’re here to work with you to make a suitable plan, and talk to you about organisations that can also help.
If you’re worried about your energy bills, please contact us.
Direct Debit questions
We work out your Direct Debit based on your new prices and energy used over the year. If we think the Direct Debit is too high, or too low, then we'll let you know.
We work out your Direct Debit based on your new prices and energy used over the year. If we think the Direct Debit is too high, or too low, then we'll let you know.
To work out your monthly Direct Debit amount, we:
- look at your energy use to date and how much you’re likely to use until 31 March, or the end of your contract if you’re on a fixed plan
- take into account your current balance and any other costs such as the standing charge and any add-ons you have
- divide the amount by the number of payments left until 31 March, or the end of your contract, and that gives us your monthly amount
Our aim is to make sure you don’t build up unexpected debt by the end of winter, or the end of your contract if you're on a fixed plan.
It’s good for your balance to be in a bit of credit as it acts like a pot of money to cover when your energy use is higher.
For example, you’re likely to build up credit in the summer months when energy use is lower, but you might need to tap into your credit in the colder and darker winter months when energy use can be much higher.
We check you’re paying the right monthly amount so your balance stays on track for the whole year.
Even if your balance is in credit, it might be that we still need to increase your monthly payments. This would be if we’ve worked out what your energy use is likely to be and that your balance is likely to go below zero by the 31 March or end of your plan.
We’ll use your new prices to run a Direct Debit check-in on your accounts to make sure your payments match the energy being used. Things like using more heating, or watching more TV than usual, can change how much energy you’re using. So checking in on your monthly payments is a way to protect you from ending up with a negative balance – even if it’s looking healthy right now.
Yes, if you're on a variable rate plan then you’ll pay less if you pay by Direct Debit.
We estimate our average customer will save £123.60 a year by choosing Direct Debit.
Paying a monthly Direct Debit amount also means you don’t have to spend time paying your bills every month. And it helps to split the cost of your energy bills into equal payments throughout the year.
Help and support
If you’re concerned about topping up or paying your energy bill, contact us as soon as possible.
We’re here to help, and our teams will be able to talk you through your options and advise on what might work best for you.
We’ve supported lots of people in similar situations – and we can support you too. The sooner you speak to us the easier it will be to talk you through what support and advice is available.
Let us know if:
- Your financial circumstances have changed
- You’re elderly, have a disability or long-term illness
We’re here to work with you to make a suitable plan, and talk to you about organisations that can also help.
If you’re worried about your energy bills, please contact us.
We work with a number of charities and organisations that offer free support.
Citizens Advice
- Citizens Advice England and Wales
- Citizens Advice Scotland
- Adviceline (England and Wales): 0808 223 1133
- Adviceline (Scotland): 0808 196 8660
National Debtline
- National Debtline
- Helpline: 0808 808 4000
StepChange Debt Charity
- StepChange
- Debt helpline: 0800 138 1111
Civil Legal Advice
- Check if you can get legal aid
- Telephone: 0345 345 4 345
Here are trusted organisations you can contact for more energy-saving advice and tips:
Sources and references
1 Figures are for typical domestic consumption paid by Direct Debit as of 1 October 2023 (11,500 kWh for gas and 2,700 kWh). This will vary based on actual household usage.
2 Figures are for typical domestic consumption for customers that Pay As You Go as of 1 October 2023 (11,500 kWh for gas and 2,700 kWh). This will vary based on actual household usage.