Economy 7 and the Price Cap: How Your Rates Are Capped

Economy 7 is covered by the energy price cap, but not in the way many people assume. Ofgem sets one multi-register cap level for each payment method, and suppliers can split it between day and night rates as they choose, provided the demand-weighted average stays within the cap. For 1 October to 31 December 2026, Ofgem's typical Economy 7 direct debit figure is £1,046 a year, based on 3,400 kWh. Facts below were checked on 13 October 2026.

How does the price cap apply to Economy 7?

Ofgem calls the cap for tariffs with more than one unit rate the multi-register cap. Its 12 October 2026 call for input explains the approach: one cap level for all multi-register tariffs, varying by payment type. Suppliers can set their rates across the time bands, as long as the average of those rates, weighted by demand in each band, is at or below the cap level.

Ofgem's consumer guide puts it simply for Economy 7 and other multi-rate tariffs: there is a peak rate and an off-peak rate, and together they cannot be more than the price cap. The cap applies to default tariffs, also called standard variable tariffs. A fixed deal follows its own contract rates.

What is the Economy 7 cap level for October to December 2026?

Ofgem's summary of changes, dated 26 August 2026, gives these typical annual figures:

On the previous consumption basis, the October to December dual-fuel direct debit figure is £1,935 rather than £1,723; that like-for-like number is the one Taupia's price cap guide leads on. Ofgem's table uses its typical consumption values: 2,500 kWh of electricity and 9,500 kWh of gas for single-rate homes, and 3,400 kWh for multi-register meters such as Economy 7.

There is no VAT on electricity from 1 October 2026 to 31 March 2027, and that includes Economy 7 electricity; see our electricity VAT guide. Standing charges and rates also vary by region, which our regional rates page breaks down.

Why are day and night rates not capped separately?

Because the cap is built on a typical demand profile rather than on each time band. Ofgem's call for input says this single-profile approach may no longer suit a market with more time-of-use tariffs, and that a profile reflecting single-rate customers undervalues the benefit multi-rate customers bring by using energy outside peak times.

In practice, two suppliers can offer quite different Economy 7 default tariffs that both comply. One may have a low night rate and a higher day rate; another may be flatter. What you pay depends on how your own use falls between the two.

Ofgem's programme of work, published in August 2026, says it will consider whether the cap approach for Economy 7, and the wider rules, are delivering good outcomes. That includes working with suppliers so Economy 7 customers get the information they need to make informed choices.

Should you stay on Economy 7?

There is no general answer, and no tariff is guaranteed to save money. A quick way to check:

1. Find your day and night kWh on your bill. An Economy 7 meter records them on separate registers.
2. Multiply each by its unit rate and add the standing charge for the year.
3. Price the same total use on a single-rate tariff, including its standing charge.
4. Compare the two totals.

If most of your electricity is used in the day, a single rate may cost less. If you run storage heaters or heat water overnight, Economy 7 may suit you better. Ask the supplier whether a change of tariff type needs any work on the meter at your address.

What did Ofgem announce on 12 October 2026?

Ofgem opened a call for input called Energy price cap: updating the time-of-use methodology. The driver is market-wide half-hourly settlement: Ofgem says around 24 million electricity supply points had moved over by September 2026, with the rest due by May 2027, which exposes suppliers to the real cost of when customers use energy.

It sets out three broad options:

The timeline:

• 20 November 2026: responses close.
• Spring 2027: Ofgem reviews and publishes responses.
• First half of 2027: further consultation and engagement.
• Second half of 2027: Ofgem's initial aim for incremental change to the time-of-use approach.

A call for input is not a decision, so Economy 7 bills this winter are set under the existing approach.

What happens on 1 January 2027?

Ofgem publishes the cap for 1 January to 31 March 2027 on 25 November 2026, and says it may publish earlier if external reasons require it. Read our January 2027 forecast and our guide on whether to fix before January.

Where Taupia fits

Taupia monitors your energy bills, compares tariffs against your own usage, including day and night use where your bill shows it, and switches only once you approve. It is free, and it never guarantees a saving.