From 1 July 2026, the energy price cap for a typical household paying by direct debit for gas and electricity will increase by 13%, pushing the annual bill to £1,862. This represents a significant jump of around £221 compared to the previous quarter, impacting millions of homes across Great Britain.
Ofgem announced on 27 May 2026 that while overall bills are rising, the increase isn't uniform across fuels. Electricity unit rates are set to climb by approximately 5%, but it's gas unit rates that are seeing the sharper rise, up by 24%.
The Numbers Breakdown
For the July to September 2026 period, the specific costs for electricity are:
- Daily standing charge: 57.19p
- Unit cost per kWh: 26.11p
These figures, confirmed by the Energy Saving Trust, mean that for a typical medium dual-fuel household, using Ofgem's 2026 Typical Domestic Consumption Value (TDCV) of 2,700 kWh for electricity annually, the electricity component of your bill will reflect these higher rates.
"Today's price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy. We understand many will be concerned about rising prices."
– Tim Jarvis, Ofgem CEO (27 May 2026)
Why the Price Hike?
The latest increase is attributed to ongoing volatility in global energy markets, particularly higher wholesale gas prices. The US/Israel conflict with Iran in 2026 has contributed to this latest surge, though prices are not expected to reach the peak levels seen in 2022 following Russia's invasion of Ukraine.
The UK's reliance on gas for electricity generation plays a crucial role. In 2024, gas set the electricity market price 85% of the time, and 30% of the UK's electricity was generated from gas. This makes UK electricity prices particularly sensitive to fluctuations in the global gas market, more so than countries like Germany (16% gas for electricity) or France (3%).
What this means for you
The £221 increase to the typical annual energy bill will put further strain on household budgets. For a medium household consuming 2,700 kWh of electricity annually, the new unit rate of 26.11p/kWh and a daily standing charge of 57.19p will directly impact your quarterly electricity costs.
For example, over a quarter (92 days), the standing charge alone will be £52.62 (57.19p x 92). If you use 675 kWh of electricity in that quarter (a quarter of the typical annual 2,700 kWh), your unit cost would be £176.24 (26.11p x 675). This means your electricity component for that quarter would be around £228.86, before any gas costs are added.
Domestic energy costs already account for 6% of total household expenditure on average, rising to 10% for the lowest income households. This latest increase will disproportionately affect those already struggling.
Government Support – Are You Eligible?
While prices are rising, there are existing government schemes designed to help with energy costs:
- Warm Home Discount Scheme: Provides £150 off electricity bills for winter 2025 to 2026 for eligible low-income households or those receiving the Guarantee Credit element of Pension Credit.
- Winter Fuel Payment: Offers between £250 and £600 to help with heating bills for those over state pension age.
- Cold Weather Payment: A £25 payment for each 7-day period of very cold weather (between November and March) for eligible individuals.
- Household Support Fund: Local councils can use this fund to help with essential costs, including energy bills. Contact your local council for details.
It's also worth noting that GOV.UK stated in April 2026 that the government is removing an average of £150 of costs from household energy bills, a separate measure aimed at easing the overall burden.
What to do right now
- Check Your Bill: Understand your current unit rates and standing charges, and compare them to the new cap figures effective from July 1st.
- Monitor Usage: Keep a close eye on your electricity consumption. Small changes can add up.
- Review Eligibility: Check if you qualify for any of the government support schemes mentioned above.
- Contact Your Supplier: If you are struggling, speak to your energy supplier. They have a duty to help customers in vulnerable situations and can offer advice or payment plans.
The Broader Picture
It's not just households feeling the pinch. Business electricity prices in the UK also saw a sharp increase, peaking at 28.39 pence per kWh in Q4 2023 and remaining 75% higher in Q4 2024 than at the start of 2021, according to the Office for National Statistics. The government has introduced the British Industrial Competitiveness Scheme, which will cut electricity bills by up to 25% for over 10,000 businesses, with a one-off payment in 2027. Crucially, no household bills will increase as a result of this business support.
When is this effective?
The new energy price cap and associated unit rates are effective from 1 July 2026 and will remain in place until 30 September 2026.
Where to get help
For personalised advice and support, consider contacting your energy supplier directly or your local council regarding the Household Support Fund. You can also find independent advice from organisations like the Energy Saving Trust.
Sources
- Ofgem — Energy price cap announcement, 27 May 2026
- Energy Saving Trust — Price cap unit rates and standing charges, July-September 2026
- Office for National Statistics (ONS) — Business electricity price trends
- House of Lords Library Briefing — Electricity prices in Great Britain, June 2026
- GOV.UK — Information on living costs and government support, April 2026