Donate Now

Fuel Bank Foundation calls for energy reforms to Energy Price Cap

August 22, 2025

Fuel Bank Foundation, the national fuel poverty charity, is calling for reforms to the energy price cap, including scrapping the quarterly review period in favour of it going back to every six months.

The charity, which provides emergency financial support to households with prepayment meters, says the frequent changes to energy prices creates confusion and uncertainty for customers, especially those who are vulnerable, and makes it more difficult to budget spending.

The energy price cap sets the amount energy suppliers can charge customers for each unit of gas and electricity they use. Introduced in 2019 by regulator Ofgem, the aim of the cap was to prevent millions of households on expensive variable tariffs from being overcharged.

Ofgem originally reviewed the price cap every six months but changed it to quarterly in 2022 to better reflect wholesale energy costs so that any savings can be passed on to customers more quickly.

“We’re not seeing the same extreme volatility in the energy markets as we did in the first few years post the energy crisis. While gas and electricity prices remain considerably higher than they were before 2022, they appear to have reached a plateau. There isn’t the same need, therefore, for regular price cap reviews. “While we understand the intention behind quarterly reviews, people on the lowest incomes need simplicity and clarity. Millions of households are already navigating difficult financial situations, whether it’s energy debt, other household bills or paying off debt on credit cards and loans. The frequent price changes add to the financial stress and make it even harder to budget. “Reducing the frequency of price cap updates also makes it easier for us and other support organisations to explain changes, reassure customers, and help them take meaningful action.”

Matthew Cole, CEO of Fuel Bank Foundation

Fuel Bank’s call for less frequent reviews comes ahead of Ofgem’s August price cap announcement. The energy regulator will announce the new cap on 27^th August for the period 1^st October to 31^st December 2025.

According to Fuel Bank’s forecast, the price cap for prepayment meter customers will be £1,688 and £1,736 for those paying by direct debit – an increase of £16 on the current cap.

Along with changing the frequency of the price cap, Fuel Bank Foundation says broader reforms are needed to ensure it remains fit-for-purpose and continues to provide protection for vulnerable customers.

Ofgem has signalled its intention to consider reforming the current price cap model. In a recent speech, Ofgem CEO Jonathan Brearley said several changes could be considered, subject to market conditions remaining stable, including setting the cap every six months, increasing choice within the cap, such as low or no standing charges tariffs, and making the price cap compatible with a more flexible energy market, such as time of use tariffs.

“We welcome Ofgem’s plan to review the price cap model to ensure it works for today’s and tomorrow’s energy market. For the people we support, the cap provided a valuable lifeline during the energy crisis, and it continues to be an important safety net. But we recognise that it needs to evolve to offer not just short-term protection, but long-term affordability and stability for vulnerable customers.”

Matthew Cole, CEO of Fuel Bank Foundation