Energy price cap to rise by £221 (13%) from 1 July

The energy price cap rose by 13% on 1 July compared with the previous level, an increase of £221¹. Under the cap, typical energy bills for a medium use household are around £1,663 per year, or £139 per month, for the three months from July to September 2026². The cap is set by Ofgem, the energy regulator, which reviews it every three months³.

The cap limits the price per unit of energy rather than the total bill, so what a household pays depends on how much gas and electricity it uses². It applies only to standard variable tariffs, also called default or out-of-contract tariffs, and not to fixed tariffs². According to the latest figures from Ofgem, there are around 33 million domestic energy accounts on standard variable tariffs and 22 million on fixed tariffs².

For direct debit customers, average unit rates from 1 July to 30 September 2026 are 26.11p per kWh for electricity, up from 24.67p, with a standing charge of 57.19p per day, down from 57.21p, and 7.33p per kWh for gas, up from 5.74p, with a standing charge of 29.04p per day, down from 29.09p². Prepayment meter customers pay the same standing charge but slightly lower unit rates: 25.32p per kWh for electricity and 7.07p per kWh for gas, which works out £43 lower than the direct debit cap level². Customers who pay on receipt of their bills pay the most: 27.56p per kWh for electricity and 7.71p per kWh for gas, £133 higher than the direct debit cap level². These are average prices across England, Scotland and Wales, and exact rates depend on where a household lives².

The increase is not split evenly between fuels. The cost of a single unit of electricity is rising by less than 1%, while a single unit of gas is rising by 8.7%². Ofgem says this reflects the government's recent decision to temporarily remove VAT costs from electricity bills².

Fair By Design also says that after the price cap took effect, the standard credit premium will be £135 per year, that energy prices are still around 45% higher than winter 2021-22, and that an estimated 6.1 million households are living in fuel poverty across the UK¹. It cites Ofgem figures showing consumer energy debt reached £3.82 billion at the end of Q3 2024¹.

Why it matters for households

The cap applies to households on standard variable tariffs, which Ofgem figures put at around 33 million domestic accounts². For a medium use household paying by direct debit, the July level equates to about £139 a month, but a household using twice the average amount would pay much more than £1,663 a year, and one using half as much would pay much less². The actual rates charged also depend on where a household lives, how it pays and the type of meter it has³. The gas unit rate rose by 8.7% while the electricity unit rate rose by less than 1%, so the increase is concentrated in heating and hot water². Households on fixed tariffs are not affected by the cap².

What happens next

The price cap for October to December 2026 was announced at the end of August and will rise by a further 4% compared with the July rates, to £1,723 per year for a typical medium use household, or £144 a month². Ofgem's next announcement dates are 25 November 2026 for the period 1 January to 31 March 2027, and 23 February 2027 for the period 1 April to 30 June 2027³. Cornwall Insight has predicted a further 9% rise in January, adding about £12 to the typical monthly bill². Fair By Design has called for the smart meter rollout target of 75% of households, due to end in 2025, to be extended before the end of that year¹.