UK energy price cap will rise by 13% from July 

Energy regulator Ofgem on Wednesday 27 May announced a 13% increase of the energy price cap for the period covering 1 July to 30 September 2026. 

The price cap refers to the default tariff applied when a customer has not signed for a fixed-rate tariff. It sets a maximum rate per unit and standing charge that can be billed to customers for their energy use. 

This increase is a result of higher wholesale gas prices, caused by the ongoing conflict in the Middle East. However, prices remain well below the height of the energy crisis in 2022 when the government stepped in to cap bills at £2,500.  

Currently, 40% (22 million) of accounts are fixed tariffs and are therefore unaffected by this price rise. 

From July, electricity prices are set to increase by less than gas prices – unlike what we saw during the energy crisis.  

Customers will see a smaller price increase of around 5% on their electricity bills compared to gas bills which are rising by 24%. This reflects the increase in the amount of renewable generation on the system and therefore reduced reliance on gas to generate our electricity. 

The current price cap for a typical household paying by direct debit for gas and electricity is £1,641. Based on the energy use of a typical domestic household, from July the price cap will rise by £18 a month for the average household using both electricity and gas if this level was sustained for a year. 

Tim Jarvis, Ofgem CEO, said: “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. While energy use typically falls over the summer months, there are still practical steps households can take to manage costs, including exploring fixed tariffs or changing their payment method. Smart meter customers can also take advantage of half price or cheap electricity at the weekends.  

“While our energy supplies remain secure, the best way to limit this exposure is by investing in our energy network. That’s why we’re unlocking the funding needed for the biggest transformation of our lifetime to deliver a system that is secure, resilient, and works for consumers across Great Britain.” 

Consumers have a range of options to help reduce their energy bills, including switching or fixing their tariff. They can also opt for different payment methods such as moving from standard credit to direct debit which could save customers around £143 on their bills. 

Additional savings are also available through offers such as half price or lower cost electricity at weekends, which are typically accessible to households with smart meters and other low carbon technologies. 

Ofgem is today also publishing an update on how much energy a typical household uses, known as the Typical Domestic Consumption Review. 

Typical Domestic Consumption Values (TDCV) are used to set the energy price cap and help show what an average home spends on gas and electricity. Ofgem updates these every few years to make sure they still reflect how much energy people actually use. 

Under our existing TDCV, the typical household bill from July is £1,862 (up from £1,641). 

From 1 July, the figures will be updated to reflect the fact that households are using less energy than before – around 7% less electricity and 17% less gas compared to the last review. 

As a result, the price cap level from 1 July will be £1,663 per year – reflective of these updated values.  

The regulator urges anyone struggling with their bills to reach out to their supplier as soon as possible in the first instance. Suppliers must do all they can to support customers in paying their bills. That could include tailored repayment plans, which can help households regain control and avoid falling further behind, or routes to financial assistance and debt advice. 

It’s important for suppliers to know why someone hasn’t paid their bill, in advance wherever possible, so they can target their help and support.