OFGEM has today announced a 13% increase in the energy price cap, raising it from £1,641 to £1,862, and increasing average energy bills by an extra £18 a month from 1 July 2026.

Wholesale prices increased sharply in February and March after conflict in the Middle East damaged energy infrastructure and disrupted oil and gas supply through the Strait of Hormuz, a key route for global trade. Although a temporary ceasefire helped calm markets, it hasn’t been enough to bring prices down enough to lower the cap.

What is the Energy Price Cap?

The energy price cap is a limit set by OFGEM on what suppliers can charge you for each unit of gas and electricity, as well as the daily standing charge[1]. It applies to customers on standard variable tariffs, including those who pay by:

• Standard Credit, which is a payment made when you get your energy bill
• Direct Debit
• Prepayment meter
• Economy 7 (E7) Meter, which charges different rates for day and night usage

It’s designed so that prices closely reflect the actual cost of supplying energy, and it’s decided by what OFGEM considers typical energy use for the average UK household.

This means your bill might be either higher or lower depending on your household’s actual energy use.

OFGEM reviews the cap every three months, so it can rise or fall throughout the year, depending on changes in the wholesale energy market.

What’s the new cap?

OFGEM has announced today that the cap will increase to £1,862 per year, a 13% increase from the current level, starting from 1 July to 30 September 2026[2].

This means the new average unit rates and standing charges from 1 July to 30 September will be:

New cap (July to September 2025):

• Electricity: 26.11p per kWh, 57.19p daily standing charge
• Gas: 7.33p per kWh, 29.04p daily standing charge

Unit rates and standing charges may vary based on where you live. This is based on things like how many people live in your region, how much energy is used in the region on average and the cost of infrastructure and maintenance of the supply network[3]. To find out more about unit rates and standing charges, you can check the OFGEM website.

This means many households could likely see a sharp rise in their energy bills over the summer months, though how much it’ll increase by will depend on your usage.

What is the current energy price cap?

From 1 April to 30 June 2026, the energy price cap is set at £ 1,641 per year for a typical household on a dual-fuel tariff (using both electricity and gas) paying by Direct Debit.

Currently, average unit rates and standing charges are:

• Electricity: 24.67p per kWh, with a daily standing charge of 57.21p
• Gas: 5.74p per kWh, with a daily standing charge of 29.09p

Figures are rounded to two decimal places and include 5% VAT.

How might this affect me?

While it’s important to remember that your overall costs may still depend on energy usage, a rise in the energy price cap during the summer may feel frustrating, especially with the increased cost of living.

The bigger concern is later in the year. Energy use usually rises again as the weather gets colder for many households. The October price cap will depend partly on what happens next in the Middle East. However, because energy infrastructure has been damaged and supply has been disrupted in the conflict, prices are unlikely to fall back to April’s level by autumn.

Can I ‘beat the cap’?

Some fixed tariffs are now available that could save you money compared to the new cap that’s coming.

Fixing your tariff means locking in your unit rates and standing charges for a set period, usually 12, 24 or even 36 months, which can help protect you from future price rises and make your bills more predictable, but could also lock you into paying higher prices if the cap were to go down.

If you’re thinking about switching to a fixed deal, it’s important to take your time to compare options carefully. Make sure the tariff suits your needs and check for any exit fees or contract terms.

If you’re worried about affording your energy bills, we’re here to help. Get free debt advice online or call 0800 316 1833 to speak to one of our experts.

 Check whether you’re eligible for extra help with BudgetSmart.  Our tool to help you maximise your income and save within your budget.

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[1] Energy price cap will rise by 13% from July | Ofgem

[2] Energy price cap unit rates and standing charges | Ofgem

[3] Energy price cap unit rates and standing charges | Ofgem