UK Energy Price Cap Estimate Exceeds £4000

The UK energy price cap is the maximum amount suppliers can charge households for gas and electricity each year if they are on a default or standard variable tariff. It’s set by Ofgem (the Office of Gas and Electricity Markets) to make sure customers pay a fair rate that reflects wholesale energy prices, supplier costs and a reasonable profit margin.

It’s important to remember the price cap limits the cost per unit of energy, not your total bill. If you use more gas or electricity than average, you’ll still pay more overall — but the cap helps protect consumers from sudden, extreme price rises.

The UK Energy Price Cap in 2025

As of October 2025, the energy price cap for a typical dual-fuel household paying by direct debit is £1,755 per year. This figure reflects average usage of 2,700 kWh of electricity and 11,500 kWh of gas per year.

The cap is now reviewed every three months, meaning it changes in January, April, July and October to follow the wholesale market more closely.

Although prices have fallen since the record highs of 2022, energy costs remain much higher than pre-crisis levels. For many households, heating bills still account for over half of their total annual energy spend.

The energy price cap was originally introduced to protect consumers from fuel poverty and unfair price fluctuations. However, with wholesale costs still elevated, even the capped rates can feel expensive — especially during the colder months when energy use rises sharply.

How Can a New Boiler Help Reduce Energy Costs?

If you’ve noticed your heating bills creeping up, it might not just be the price cap at fault - your boiler’s efficiency could be playing a big part.

Newer boilers are designed to waste far less gas than older models. Most modern boilers operate at around 92–95% efficiency, while some older, non-condensing boilers can run at 60% or less. That means an old boiler could waste 40p of every pound you spend on heating.

Here’s how efficiency typically changes over time:

Upgrading to a modern, A-rated boiler could save you up to £500 a year depending on your home size, heating habits and the system you replace.

Average Savings by Property Type

The amount you save depends on your property and heating demand. The table below shows typical savings when replacing an old, inefficient boiler with a new high-efficiency model:

Modern boilers heat water faster, run more quietly and keep rooms at a consistent temperature, improving comfort while reducing waste.

New boiler cost is as transparent as ever in our iHeat guide.

Other Ways to Cut Your Energy Bills

If you’ve already upgraded your boiler or aren’t ready just yet, there are still plenty of simple ways to lower your bills and stay warm efficiently.

Learn to Control Your Heating

Get familiar with your thermostat and heating schedule. Setting your boiler to heat your home only when you need it can make a noticeable difference. Try setting your heating to come on 30 minutes before you wake up and turn off 30 minutes before bed. Small temperature adjustments can save up to 10% on heating costs each year.

Insulate Your Home

Good insulation helps retain heat so your boiler doesn’t have to work as hard. Around a quarter of a home’s heat loss escapes through the roof in uninsulated properties. Loft and cavity wall insulation are great long-term investments, cutting bills by as much as £200 a year in some homes.

Block Draughts

Keep the warmth in by using draught excluders, rubber window seals and door brushes. Even closing curtains at night adds a layer of insulation, helping to trap heat.

Clear Space Around Radiators

Avoid blocking radiators with furniture or hanging clothes directly over them. This prevents heat from circulating and forces your boiler to work harder. Radiator reflector panels are also a cheap and easy way to bounce heat back into the room.

Service Your Boiler Regularly

A yearly Gas Safe boiler service keeps your system efficient and safe. It also ensures your warranty remains valid and helps spot small issues before they turn into expensive repairs.

Use a Smart Thermostat

Smart thermostats learn your routine and adjust heating automatically. You can control them via your phone, ensuring you’re never wasting energy heating an empty home. Many iHeat installations come with smart control options for this very reason.

Why Now Is the Time to Act

Even though the price cap has stabilised, household bills remain significantly higher than before the energy crisis. By improving your home’s energy efficiency — starting with your boiler — you’ll reduce both your carbon footprint and your costs.

A new, A-rated boiler paired with smart heating controls can save hundreds of pounds every year and make your home more comfortable, reliable and future-ready.