UK households are set to see their typical annual energy bills rise by £22 from July 1, 2026, as Ofgem increases the energy price cap to £1,663 per year. This change, announced by Ofgem on May 27, 2026, follows a period of significant wholesale gas price volatility.
The current energy price cap, in effect from April 1 to June 30, 2026, stands at £1,641 per year for a typical dual fuel household. From July 1, this will climb to £1,663, marking a 13% increase in the cap level for the new quarter, though the direct annual bill increase for consumers from the current cap is £22.
Why are bills going up?
The primary driver behind this increase is a sharp rise in wholesale gas prices. Over the past three months, wholesale prices have surged by 28%. This volatility has been significantly exacerbated by ongoing conflict in the Middle East, particularly the US-Israel war with Iran.
The conflict has disrupted oil and gas exports from the Gulf region through the Strait of Hormuz, a critical route for a fifth of the world's oil and gas supply. This has caused wholesale gas prices to soar by over 65% in recent weeks, as of April 2026, directly impacting the costs faced by energy suppliers.
It's important to remember that electricity prices in the UK are still largely determined by the cost of gas, meaning gas price increases ripple across both parts of your energy bill. From July, gas bills are projected to rise by approximately 24%, while electricity costs will increase by around 5%.
What this means for you
For a typical household, this means an extra £22 on your annual energy bill, or roughly an additional £1.83 per month. While this might seem like a small amount, it adds to the ongoing cost of living pressures many families are already facing. Households with higher energy consumption will, of course, see a larger absolute increase.
What you can do right now
- Check your usage: Understanding where your energy goes is the first step. Smart meters can help you track real-time consumption.
- Boost energy efficiency: Simple measures like ensuring your home is well-insulated, turning off lights and appliances when not in use, and using energy-efficient settings can make a difference.
- Contact your supplier: If you're struggling to pay, speak to your energy provider. They have a duty to help and can discuss payment plans or support options.
- Explore government support: Consider checking if you are eligible for any government grants or schemes designed to help with energy costs.
But there are risks
The increase highlights the UK's continued exposure to global energy market volatility. While there have been discussions around UK oil and gas tax interventions, their ability to fully shield consumers from these international price shocks remains a key question. The Energy & Climate Intelligence Unit (ECIU) has commented on how gas price volatility linked to the Middle East war is driving these bill increases, underscoring the broader geopolitical risks.
Where to get help
If you are worried about your energy bills, don't suffer in silence. Your energy supplier is the first port of call, but independent organisations like Citizens Advice and National Energy Action can also offer free, impartial advice and support.
Sources
- Ofgem — May 27, 2026 energy price cap announcement
- Energy & Climate Intelligence Unit (ECIU) — Comment on gas price volatility
- edie.net — Article on UK oil and gas tax intervention