Ofgem has decided to update the benchmark consumption used in the energy price cap to align with the 2023 Typical Domestic Consumption Values (TDCV), taking effect from 1 January 20261. The decision follows a consultation opened on 27 August 2025 and closed on 25 September 2025, with the decision and responses published on 21 November 20251.
The benchmark is the assumed amount of energy a typical household uses when the cap is set. It has been based on 2017 TDCVs since the cap was introduced on 1 January 2019, and Ofgem says it no longer reflects typical household consumption1. The change lowers the assumed annual usage figures, as set out in the decision1:
| Fuel and rate | Current benchmark (kWh) | From 1 January 2026 (kWh) |
|---|---|---|
| Gas | 12,000 | 11,500 |
| Electricity: single rate | 3,100 | 2,700 |
| Electricity: multi rate | 4,200 | 3,900 |
Ofgem says the decision "will have the effect of increasing the cap level by about £9 per year for a typical customer from January 2026", and that the impact across payment methods will be broadly the same1. It describes the change as technical, intended to strike a balance between price protection and allowing suppliers to recover efficient costs1. The typical household figure is the number most often quoted when cap levels are announced, and it is this benchmark that produces it.
Ofgem also decided to maintain a single benchmark across all payment types, rather than setting separate figures for direct debit, prepayment and standard credit1. It will update standard licence conditions so the benchmark tracks future TDCV changes, and says it remains committed to reviewing TDCV every two years1. A further TDCV review is expected in 2026, with a call for input in early 20261.
Ofgem received 14 responses: nine from suppliers, two from consumer groups and charities, and three from individual consumers1. It says the majority supported updating the benchmark, including all consumer groups and suppliers who responded, while individual consumers generally did not1. Suppliers unanimously supported the update but differed on the data source, with some preferring 2023 DESNZ median data1. Consumer groups asked Ofgem to consider the impact on consumers and the interaction with the headroom allowance1.
"We have decided to update the benchmark consumption in the cap methodology to align with current TDCV (2023), commencing 1 January 2026"
Why it matters for households
The benchmark does not cap what any household pays. It sets the usage figure behind the headline cap level, so a home using less than the benchmark can pay less than the quoted figure and one using more can pay more. Ofgem's own explanation of why a bill can be higher than the cap turns on this distinction.
Lower assumed usage means the fixed costs recovered through unit rates are spread over fewer kilowatt hours, which is why the cap level rises even as the assumed consumption falls. Ofgem states that sustained lower consumption has implications for recovering costs that do not vary with usage1. For a household that has cut its gas and electricity use, the effect on the unit rate matters more than the change to the benchmark itself.
The decision keeps one benchmark for all payment methods, so the rates by payment method continue to differ through the underlying cost allowances rather than through different assumed usage. Ofgem has not reported any change to standing charges as part of this decision.
What happens next
The new benchmark applies from charge restriction period 15b, commencing 1 January 2026, implemented through a modification under section 1(2) of the Domestic Gas and Electricity (Tariff Cap) Act 20181. Ofgem expects a TDCV review in 2026 and says it will issue a call for input in early 20261. It has not reported the outcome of that review.
Sources1 cited
- Energy price cap benchmark review: decision, ofgem.gov.uk