Energy bills are set to increase by £221 a year from July as Ofgem increases its price cap by 13%. That works out as an extra £18 a month for the typical household. The energy price cap will be increasing to £1,862 a year for the typical household for people who pay by direct debit in England, Scotland and Wales. It’s up from the £1,641 cap currently in place.
However, that figure represents the typical household. You can use your current bills to estimate how much your energy bills will change by using our interactive calculator. The price cap sets the maximum you can be charged for unit rates and standing charges, so your bill can be higher or lower than the price cap figure.
Why Are Energy Prices Rising?
Ofgem has attributed the increase to higher wholesale gas prices, caused by the ongoing conflict in the Middle East. The cap is still below where it was during the height of the energy crisis in 2022, when the government put a limit on bills of £2,500.
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.”
How the Price Cap Works
The energy price cap doesn’t set a limit to how much you can be charged, but rather limits the amount energy companies can charge for daily standing charges and per unit charges. This means your actual bill will depend on your energy usage. For example, households that use more energy will pay more than the cap figure, while those who use less will pay less.
To help you understand the impact on your household, we have created an interactive calculator. Simply enter your current annual energy spend or your monthly direct debit amount, and the calculator will estimate your new bill under the July cap.
The new cap comes into effect on 1 July 2026 and will apply to all standard variable tariff customers in England, Scotland, and Wales. Ofgem reviews the cap every three months, so further changes are expected later this year.
