The energy price cap is set to increase by 10% from July, adding £204 to the typical household's annual energy bill, industry regulator Ofgem has announced.
New Cap Levels
From July 1, the cap on the most common household energy tariffs will rise from £1,834 to £2,038 per year for the average dual-fuel customer paying by direct debit. This marks the first increase in the cap since January, when it fell by £87.
Ofgem said the rise was driven by higher wholesale energy costs, which have increased due to geopolitical tensions and global demand. The regulator also noted that the cap remains below the £2,500 level that was in place before the government's Energy Price Guarantee was introduced.
Impact on Households
The increase will affect approximately 28 million households in England, Wales, and Scotland. Customers on prepayment meters will see their cap rise from £1,782 to £1,980, while those paying by standard credit (often quarterly bills) will see an increase from £1,958 to £2,174.
Ofgem chief executive Jonathan Brearley said: "We know that the cost of living is still very challenging for many people, and this increase will be worrying for those already struggling to pay their bills."
Government Response
The government has faced criticism for not doing more to support households. A spokesperson said: "We are providing £94 billion in support for the cost of living, including £1,200 for the most vulnerable households. We continue to work with Ofgem to ensure the energy market is fair and affordable."
However, campaign groups argue that more needs to be done. Peter Smith, director of policy at National Energy Action, said: "This rise will push many more families into fuel poverty. The government must urgently provide additional targeted support."
Advice for Consumers
Ofgem advises customers to shop around for the best deals, as fixed-term tariffs are becoming more competitive. The regulator also encourages households to take steps to improve energy efficiency, such as insulating homes and using smart meters.
Customers struggling with bills should contact their supplier for help, including payment plans and hardship funds. Ofgem has also reminded suppliers to ensure they are treating customers fairly and providing support where needed.
