From July, millions of households across Britain will see their energy bills jump by 13% as Ofgem lifts the energy price cap. This significant increase means the average annual energy bill for a typical household on a standard variable tariff will rise by £209, pushing the new cap to £1,862 per year.
What Changed and By How Much?
The energy regulator, Ofgem, has confirmed the price cap will increase by 13% starting in July. This adjustment directly reflects the higher costs energy suppliers are now facing for wholesale gas, which they then pass on to consumers. For a household consuming a typical amount of energy, this translates to an extra £209 on their annual bill.
The new annual cap of £1,862 applies to those on standard variable tariffs, which is the default for most households not on a fixed-rate deal. This isn't just a percentage; it's real pounds and pence coming out of your pocket every month.
Who is Affected?
This price cap increase primarily affects households on standard variable tariffs. If you're currently on a fixed-rate energy deal, your payments won't change until your fixed term ends. However, once your fixed deal expires, you'll likely roll onto a standard variable tariff and be subject to the new, higher cap.
What This Means for Your Monthly Budget
An annual increase of £209 breaks down to roughly an extra £17.42 per month on your energy bill. For many families already grappling with rising living costs, this additional expense could mean difficult choices elsewhere in the household budget, from the weekly food shop to other essential outgoings.
When is This Effective?
The new energy price cap comes into effect from 1st July 2026. This means you can expect to see the higher charges reflected in your energy bills from that date onwards.
What You Can Do Right Now
While the increase is set, there are practical steps you can consider to mitigate the impact on your finances:
- Check Your Tariff: If you're on a standard variable tariff, it may be worth checking if there are any competitive fixed-rate deals available. While the market for cheaper fixed deals has been tight, some may offer stability against future cap rises.
- Monitor Your Usage: Understanding how much energy you use is the first step to reducing it. Consider using a smart meter to track your consumption in real-time.
- Energy Efficiency: Simple changes can make a difference. Ensure your home is well-insulated, switch off lights and appliances when not in use, and consider lowering your thermostat by just one degree.
- Budgeting: Factor the increased cost into your household budget now so you're prepared for the change in July.
But There Are Risks
The primary driver for this cap increase is the volatility in wholesale gas prices, with some reports linking the surge to the impact of the Iran war. This global instability means future price cap adjustments could remain unpredictable. While Ofgem aims to protect consumers, the cap reflects underlying market costs, which can fluctuate significantly.
Where to Get Help
If you're struggling to pay your energy bills, remember that support is available:
- Contact Your Supplier: Energy companies have a duty to help customers in financial difficulty. They can offer payment plans, advice, and information on available grants.
- Charities and Advice Services: Organisations like Citizens Advice and National Energy Action provide free, independent advice on energy bills, grants, and managing debt.
- Government Support: Keep an eye on any government schemes that may be announced to help with energy costs, particularly for vulnerable households.
What this means for you
Your monthly energy direct debit is likely to increase by approximately £17.42 from July, so it's crucial to review your household budget and explore energy-saving measures now to soften the blow.
Sources
- MSN — Reports on Ofgem lifting the price cap by 13% from July, increasing annual bills by £209 to £1,862, and linking to higher gas prices and Iran war impact.