Energy price cap will rise by 13% from July

Energy regulator Ofgem has announced a 13% increase in the energy price cap for the period covering 1st July to 30th 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 a 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 were 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 the 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 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.”

StepChange client data shows how energy prices are hitting consumers, with one in four (24%) spending more than 20% of their net income on their energy bills in April 2026.

Vikki Brownridge, Chief Executive Officer at StepChange Debt Charity, said “Whilst an increase in the energy price cap was not unexpected, it doesn’t mean it won’t hit household budgets at a time when people are struggling. The reality is that despite the reduction in usage over the summer months, this is another kick in the teeth for consumers already struggling to make ends meet. The prospect of managing these bills come winter will be a worry for millions.

“As we have seen our own clients’ energy debt almost double since 20213, the reality is that without urgent action this stands to only grow further – a rise on an existing pile of debt.  To prevent an energy affordability crisis and further acceleration in energy debt this winter, the government must provide targeted support through a social tariff which builds on the Warm Home Discount Scheme, and work with Ofgem to implement an effective Debt Relief Scheme to support customers with energy debt to repay affordably.”