Why your energy bill is still high even though the price cap has changed

Energy headlines can be confusing. One month you hear that the price cap is falling, the next that it is rising again. Yet for many households, the experience is the same either way: the monthly direct debit still feels painfully high.

There are three big reasons for this:

• the price cap is a limit on unit rates and standing charges, not your total bill
• standing charges have become a much bigger slice of what you pay
• historic energy debt and network costs are now baked into prices.

This guide explains what is actually going on and what you can realistically do about it.

What the energy price cap really is (and what it is not)

The price cap is set by Ofgem for standard variable tariffs in England, Scotland and Wales. It limits:

• how much suppliers can charge per unit of gas and electricity
• how much they can charge as a daily standing charge.

It is not a cap on your total bill.

From 1 October to 31 December 2025, Ofgem has set the cap so that a "typical" dual fuel household paying by Direct Debit would pay around £1,755 a year, based on average use. That is about 2 percent higher than the July to September level of £1,720.

Key things to remember:

• If you use more energy than the typical profile, you pay more than the headline figure.
• If you use less, you pay less – but you still pay the standing charge.
• The cap changes every three months based on wholesale costs and other factors.

That is why your bill can go up even when the yearly cap number in the news looks modest: it is only an example, not a guarantee.

Why your bill can be higher than the cap headline

Several factors mean your real bill often does not match the "typical" figure:

1. Your usage is different from the model
   Ofgem and comparison sites use an assumed annual consumption to define a typical household. If you live in a large or poorly insulated home, or electric heating is your main source of warmth, your use will probably be higher.

2. Region and payment method
   Unit rates and standing charges vary by region and by how you pay (Direct Debit, prepayment meter, or on receipt of bill). Even under the cap, some areas pay more than others.

3. Estimated meter readings
   If you do not send regular readings and do not have a smart meter sending accurate data, your supplier may base bills on estimates. Citizens Advice warns that estimated bills can be seriously out of line, especially after a cold winter or long period without readings. They recommend submitting a reading every month if you can.

4. Old debt built into the direct debit
   If you have fallen behind in the past, your direct debit may include a debt repayment element as well as the current year's usage. Ofgem recently highlighted that energy debt across households has climbed into the billions of pounds, adding around £50 a year to the average bill through the cap.

Standing charges – the daily cost you pay even if you use nothing

A big source of frustration is the standing charge – the daily fee that appears on your bill even if you barely use any energy.

Ofgem explains that the standing charge covers things like:

• moving gas and electricity through pipes and wires
• maintaining meters and networks
• supplier customer service and billing costs
• some social and environmental schemes, including support for vulnerable customers.

Citizens Advice and money sites point out that many households now pay roughly £300 a year just in standing charges for gas and electricity combined, depending on region and payment method.

For people who use very little energy – for example, someone who is out all day, or a prepayment customer trying to cut usage to the bone – this can feel like a "connection tax".

Why standing charges have become such a big issue

Standing charges have risen sharply in recent years for several reasons:

• costs of failed suppliers during the energy crisis have been spread across bills
• network and balancing costs have increased as more renewables are connected
• extra support, such as broader Warm Home Discount eligibility, is funded in part through policy costs on bills.

Campaigners, including consumer groups and independent experts, argue that this hits low users and people in smaller homes hardest. In response, the regulator has:

• carried out a review of standing charges
• proposed a small reduction in some operating cost allowances
• consulted on requiring suppliers to offer tariffs with lower or even zero standing charges alongside conventional ones.

But even with these changes, for now most households still face a daily fee just to stay connected.

Energy debt is now part of everyone's bill

Another reason bills feel stubbornly high is that they now reflect not only today's wholesale gas prices but also the legacy of the energy crisis.

Recent regulator statements and news reports show that:

• domestic energy prices are still well above levels seen before 2021
• total household energy debt is estimated at over £4 billion, adding around £50 to the annual price cap
• more people are paying late or in arrears, which raises suppliers' costs and pushes prices up for everyone.

Ofgem has announced plans for a debt relief scheme to write off a portion of this debt and new rules to stop debts building up when people move into new homes without registering. Details are still being worked out, but the aim is to reduce the burden on both indebted customers and the wider bill–paying population.

What is changing with prepayment meters and low standing charge tariffs

Prepayment customers were historically charged more than Direct Debit customers under the cap. That has now changed: the regulator equalised prepayment and Direct Debit unit rates in 2024 so that people on prepayment no longer pay a premium simply because of how they pay.

At the same time, there has been growing pressure over standing charges, particularly for prepayment users. Citizens Advice recently warned that prepayment customers who do not top up over summer can return to their meter in autumn to find a big chunk of their first top up swallowed by accumulated standing charges.

In response to widespread concern, plans are now in place for suppliers to offer at least one "no standing charge" or very low standing charge tariff under the cap, alongside more traditional structures. The idea is to give low–usage households an option that better matches their pattern, even if unit rates are higher.

Whether these new tariffs will offer good value will depend on your usage. High–use households may still be better off on a higher standing charge with lower unit rates.

Practical steps if your bill still feels unmanageable

Even with the policy changes, many people are struggling. Here are concrete steps based on Citizens Advice, MoneyHelper and regulator guidance:

1. Make sure your bill is accurate

• Send regular meter readings if you do not have a working smart meter. This helps ensure you are billed for actual usage, not inflated estimates.
• Check your bill for the tariff name, unit rates and standing charges. Citizens Advice has guides explaining how to read an energy bill and what each line means.

2. Talk to your supplier early if you cannot pay

Ofgem's rules say suppliers must offer:

• affordable repayment plans based on your circumstances
• emergency credit for prepayment meters in some situations
• extra support for people in vulnerable circumstances, including those on the Priority Services Register.

If you tell your supplier you are struggling, they should work with you to find a plan rather than simply letting debt mount up.

3. Check what help you can get

Depending on your situation, you might be able to get:

• the Warm Home Discount if you are on a low income or get certain benefits
• help from hardship funds run by some suppliers
• local welfare assistance or charitable grants.

MoneyHelper and Citizens Advice both have up to date lists of schemes and grants that can help with energy bills and other essentials.

4. Look at ways to cut usage without making your home unsafe

Simple energy efficiency steps can reduce your bill even at current prices. MoneyHelper suggests:

• reducing shower time and washing temperatures
• draught proofing doors and windows
• using heating controls effectively rather than turning everything off and on at extremes.

Grants and schemes for insulation, boiler upgrades or heat pumps may also be available if you meet certain criteria, though the details change over time.

5. Get independent advice before switching tariffs

Switching to a fixed deal or a low standing charge tariff can be a good move for some people but risky for others.

MoneyHelper and consumer sites recommend:

• comparing unit rates and standing charges together, not just the headline annual cost
• checking any exit fees for fixed deals
• thinking about how your usage pattern might change (for example, if you are planning to work from home more).

If you are unsure, speaking to a free advice service can help you avoid signing up to something that does not fit your situation.

Key points to remember

• The price cap controls rates and standing charges, not your total bill. Your actual cost still depends heavily on how much energy you use.
• Standing charges have become a substantial part of bills and apply even if you use no energy at all.
• Historic energy debt and network costs are now built into prices, which helps explain why bills remain much higher than before the energy crisis.
• New rules are being introduced so that suppliers offer low or zero standing charge tariffs and equalise prepayment and Direct Debit rates, but the impact will vary by household.
• You have rights to accurate billing, affordable repayment plans and, in some cases, emergency support – but you usually need to contact your supplier and, if necessary, an advice charity to use them.

Understanding how the cap, unit rates and standing charges fit together does not make bills magically cheaper, but it does put you back in control of the levers you can pull – from checking your tariff and readings, to seeking help and choosing how and where you use your energy.