Government’s default tariff cap and Ofgem’s broader vulnerable safeguard tariff

On 26 February 2018, the Government introduced legislative proposals to Parliament to introduce a temporary tariff cap for customers on Standard Variable (SVT) and default tariffs (the ‘default tariff cap’). 

The proposed legislation:

  • creates a new duty for Ofgem to design and implement the default tariff cap
  • places a duty on Ofgem to implement the price cap as soon as practical. 

We are committed to protecting energy customers, and we are working with Government to ensure we can implement the default tariff cap as soon as possible, once the legislation has received Royal Assent. 

Existing price protections

We have provided price protection for 5 million vulnerable consumers, following our extension in February 2018 of the prepayment safeguard tariff to cover 1 million vulnerable consumers in receipt of the Warm Home Discount. You can find further information at:

In December 2017, we consulted on extending these protections to cover around an additional 2 million vulnerable customers in winter 2018/19 if the default tariff cap can’t be introduced by winter 18/19.

Next steps

We have started to design the methodology for the default tariff cap or the extended vulnerable safeguard tariff. To inform our designs we will use a consultation process comprising a series of working papers, followed by a summary policy consultation. This will be followed by a statutory consultation on the required licence modifications. We will publish these various papers, including decision documents, on this page. 

If you have questions, please contact us at Retailpriceregulation@ofgem.gov.uk

Publications and updates

  • Published: 9th Apr 2018
  • Open letters and correspondence
  • 1 Associated documents
This paper discusses our thinking on including a headroom allowance as part of the design of the default tariff cap.

  • Published: 28th Mar 2018
  • Open letters and correspondence
  • 1 Associated documents
This paper seeks views and evidence on the market basket approach to setting the level of the default tariff cap.

  • Published: 12th Mar 2018
  • Open letters and correspondence
  • 1 Associated documents
The first in a series of working papers explaining how our thinking on the design of the default tariff cap is evolving as we gather views and evidence.

  • Published: 6th Mar 2018
  • Consultations and responses, Open letters and correspondence
  • 2 Associated documents
This open letter provides an update on our plans for retail energy price caps.