Ofgem has announced that on 1 Jan 2025, the Price Cap will rise by 1% to £1,738/year for a typical use household paying by Direct Debit. Octopus remain the only large supplier to have never charged the full price cap.
We'll get in touch with every customer this affects, with a personalised breakdown of what this means for you.
If you’re on a variable tariff, like our Flexible Octopus, the Ofgem Price Cap protects the price you pay.
The price cap specifically applies to variable tariffs because they aren’t fixed against the volatility in the energy markets. Different suppliers can refer to these tariffs in a number of ways; standard variable tariff (SVT), non-fixed, etc. At Octopus our variable energy tariff is called Flexible Octopus.
If you’d like to confirm which tariff you're on, and details like your current prices and contract dates, you can see them on your online account (scroll a little way down and look at the details below your property address).
You can read more about the energy price cap and whether it affects you on Ofgem’s website.
No: this figure is not the absolute maximum a customer could pay.
If you’re affected by the price cap, the protection you receive is relative to how much energy you use.
Ofgem calculates the price cap based on the yearly usage of a typical medium consumption home (that's 2,700 kWh of electricity and 11,500 kWh gas per year). It represents the maximum amount Ofgem considers fair for energy suppliers to charge customers on variable tariffs.
This figure is used by suppliers to apply the price caps protection against each customer's actual usage. Put simply: if you use more - or less - energy than that typical home, your own yearly energy costs on a tariff priced at the maximum rates may be higher - or lower - than the annual figure from Ofgem.
Our Flexible tariff will have slightly different unit rates and standing charges based on your payment method. The £80 isn’t a flat discount for Direct Debit customers (or a charge on non-Direct Debit customers) – it’s the typical savings an average home could see over a year on the cheaper Direct Debit dual-fuel rates.
If you change how you pay, our system will pick that up and adjust your rates automatically, so if you don’t have a Direct Debit right now, it’s super easy to access the cheapest prices. All you need to do is set up a Direct Debit online and we’ll do the rest.
Not having a Direct Debit creates us significantly more admin.
We don't think it's fair to make everyone cover that extra cost, so we do offer a cheaper rate for those who choose to pay by Direct Debit, which costs us less to manage.
Your energy prices depend on where you live and how you choose to pay.
Below is a breakdown of all Flexible Octopus rates and charges by region and payment method.
It costs us more to supply energy to some areas depending on things like proximity to generators, cost of maintaining local networks and more.
The same is true with different payment methods – for example, it costs suppliers more to administer and manage accounts that don't pay by Direct Debit, so Ofgem factors that into their Price Cap.
The price cap sets a maximum rate for:
Ofgem have shared that on average - for customers paying by direct debit - the unit rates (inc. VAT) will be:
Electric:
Gas:
Important: these are averaged figures from across all regions in the UK. As certain costs vary, e.g. what transmission network fees we pay in an area, the actual maximum unit rate varies depending on region. There are other factors too: different maximum rates for Economy 7 tariffs (which have a day and a night price) and prepayment meters.
You can see Ofgem's figures on the price cap standing charges and unit rates here.
Our Octopus 12M Fixed tariff is currently £1,629 per year for a typical home, and has no exit fees. This means if prices continue to fall, you can simply choose another tariff in your online account.
We can't really say whether it would be the best choice for you; it's best to compare rates for your area online and see if it would save you money.
If you’re on a fixed tariff, the first thing to know is that the price cap doesn’t affect your current energy contract.
We’ll always email you in advance of your fixed tariff coming to an end.
If you’d like to confirm your current prices and contract dates, you can see them on your online account (scroll a little way down and look at the details below your property address) or on any PDF energy statement. It’s usually on the second page, near the top of the breakdown for your electricity and / or gas charges for the period.
Published on 16th January 2025 by:
Hey I'm Constantine, welcome to Octopus Energy!
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