From July 1, 2026, millions of households across Britain will see their energy bills jump by 13%, as Ofgem lifts the energy price cap. This unwelcome news means the average annual bill for a typical household paying by Direct Debit for gas and electricity will rise to £1,862, an increase of £221 per year.
For most of us, this translates to an extra £18 on our monthly energy statements, a significant hit to household budgets already under pressure.
What Changed and By How Much?
The new energy price cap, effective from July 1 to September 30, 2026, marks a 13% increase compared to the previous cap period. The average annual bill climbs from £1,641 to £1,862.
Breaking this down, electricity prices are set to increase by around 5%, while gas prices will see a more substantial rise of about 24%. This reflects a reduced reliance on gas for electricity generation due to more renewable sources, but gas remains a key factor in overall costs.
Who Is Affected?
This price cap applies directly to customers on standard variable tariffs (SVT) and those using prepayment meters. If you’re one of the approximately 40% (22 million) of accounts on these tariffs, you will feel the impact of this rise.
Crucially, if you are currently on a fixed-rate energy tariff, your bills will not be affected by this specific price cap change.
Why Are Bills Rising?
Ofgem CEO Tim Jarvis confirmed the increase is "a result of higher wholesale gas prices, driven by the ongoing conflict in the Middle East." Global energy market volatility continues to directly impact what we pay at home.
A Look Back: Historical Context
While this rise is tough, it's worth noting that prices remain 54% (£2,197) lower than the peak of the energy crisis in 2022, when the government capped bills at £2,500. However, the new cap is the highest level since the first quarter of 2024, when it stood at £1,924. When adjusted for inflation, the new cap is also 6% higher than the same period in 2025.
What this means for you
Understanding the practical impact on your wallet is key. Here’s what the new cap could mean for different households:
- Average Household: If your energy usage aligns with Ofgem's typical domestic consumption values, expect your combined gas and electricity bill to increase by £18 per month, reaching an average of £155.17 per month.
- Higher Energy User: If you live in a larger home or use more energy than average, your monthly increase will be more than £18, potentially adding £25-£30 or more to your bill.
- Prepayment Meter User: You'll also see your costs rise in line with the cap. It’s vital to budget for this increase when topping up your meter to avoid running out of credit.
What You Can Do Right Now
While the increase is coming, there are steps you can take to manage your energy costs:
- Check Your Tariff: Find out if you're on a standard variable tariff or a fixed deal. If you're on an SVT, you'll be affected.
- Explore Fixed Tariffs: Ofgem CEO Tim Jarvis suggests "exploring fixed tariffs" as a way to manage costs. Compare deals from different suppliers to see if a fixed rate could offer more stability, though current fixed rates may be higher than the new cap.
- Review Payment Method: Consider if changing your payment method could offer savings or better budgeting.
- Utilise Smart Meters: If you have a smart meter, you might be able to take advantage of half-price or cheap electricity at weekends, as highlighted by Ofgem.
- Energy Efficiency: While not a direct saving from the cap, reducing your energy consumption remains the most effective way to lower your bills.
When Is This Effective?
The new price cap comes into effect on July 1, 2026, and will remain in place until September 30, 2026.
Where to Get Help
If you're struggling to pay your energy bills, don't suffer in silence. Organisations like Citizens Advice can offer free, impartial advice and support. Gillian Cooper, Director of Energy at Citizens Advice, noted that "Energy bills are going up again in July, which will be painful news for already-stretched households."
The Other Side: Calls for Action
"The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country. We know people were under pressure before this crisis, and that's why easing that burden is our number one priority." - Ed Miliband, Energy Secretary.
Mr Miliband also stressed the need to "go further and faster with this government's drive for clean homegrown power we control" to get bills down for good. Citizens Advice also highlighted that a key tool to help people, the energy debt relief scheme, "keeps being delayed."
Sources
- Ofgem — Announcement of July 2026 price cap increase
- Tim Jarvis, Ofgem CEO — Official statement on price cap
- Ed Miliband, Energy Secretary — Official statement on price cap
- Gillian Cooper, Director of Energy at Citizens Advice — Official statement on price cap impact