From July 1, 2026, UK households on standard variable tariffs will see their energy bills rise by 13%, following an announcement from energy regulator Ofgem. This increase means the average annual bill for a typical household paying by direct debit for both gas and electricity will jump from £1,641 to £1,862.
This translates to an additional £221 per year, or approximately £18 more each month, for around 33 million households across England, Scotland, and Wales. The new price cap will be in effect for the period covering July 1 to September 30, 2026.
Who is affected and why?
The rise primarily impacts households on standard variable tariffs, which are typically the default option if you haven't switched to a fixed deal or if your fixed deal has ended. Around 40% of domestic energy accounts, totalling approximately 22 million households, are currently on fixed tariffs and will not see an immediate change until their current deals expire.
Ofgem points to a significant increase in wholesale gas prices as the main reason for this cap adjustment. These prices have climbed sharply due to the ongoing conflict in the Middle East. Looking at the breakdown, gas prices are projected to increase more significantly, by about 24%, while electricity costs will rise by around 5%. This difference highlights the growing contribution of renewable energy to electricity generation, which helps reduce reliance on gas.
Ofgem's updated consumption values
Alongside the price cap increase, Ofgem is also updating its Typical Domestic Consumption Values (TDCV) from July 1, 2026. These revised values reflect a long-term trend of reduced energy usage by households, with estimates showing around 7% less electricity and 17% less gas consumed compared to previous figures. While this update changes how 'typical' energy use is calculated, it doesn't directly reduce your bill unless you actively lower your consumption.
What this means for you
Your energy bill is set to increase by £18 a month if you are on a standard variable tariff. This will impact your household budget directly, meaning less money available for other essential spending or savings. It's crucial to understand this immediate financial hit and plan accordingly.
Practical steps to consider right now
- Check your tariff: If you're unsure whether you're on a standard variable tariff, contact your energy supplier immediately. If you are, you'll be directly affected by this price rise.
- Review your usage: Even small changes can add up. Consider reducing heating temperatures by a degree, switching off lights in empty rooms, or unplugging devices not in use. The updated TDCV figures show a general trend of lower household consumption, suggesting many are already finding ways to cut back.
- Explore fixed deals: While the energy market remains volatile, it may be worth checking if any fixed tariffs are available from your current supplier or others. Compare any potential savings against the security of a locked-in rate, but be mindful that fixed deals might still be higher than the current cap.
- Budget adjustment: Factor the additional £18 per month (or more, depending on your usage) into your household budget from July.
When is this effective?
The new energy price cap comes into effect on July 1, 2026, and will remain in place until September 30, 2026. Ofgem reviews the cap quarterly, so another update can be expected for the period starting October 1, 2026.
Where to get help
If you are struggling to pay your energy bills, or need advice on reducing your energy consumption, your energy supplier can offer support and information on available grants or payment plans. Independent energy advice services can also provide guidance on managing your energy costs.
But there are risks
While the price cap aims to protect consumers, the market remains unpredictable. The primary driver for this increase, rising wholesale gas prices due to international conflicts, highlights the vulnerability of energy costs to global events. Households on fixed tariffs are temporarily shielded, but will face the prevailing market rates once their deals expire, which could be higher or lower depending on future cap adjustments.
Sources
- Ofgem — May 27, 2026, energy price cap announcement
- The House of Commons Library — Gas and electricity prices during the ‘energy crisis’ and beyond
- ITVX — Energy bills to rise more than £200 a year as Iran war impacts UK households
- MSN — UK energy price cap rises 13% to £1,862 from July
- investments.halifax.co.uk — Market news
- Secret London — Household energy bills will rise by 13% from July