Last reviewed: 30 May 2026
Energy bills for around 22 million UK households on the default tariff will rise by an average of £221 a year from 1 July 2026 after Ofgem confirmed a 13 per cent increase to its quarterly price cap. The new level takes the typical annual bill from £1,641 to £1,862 and is the highest cap setting since early 2024.
What changed at the Ofgem announcement
Ofgem published the new cap on 27 May 2026. Under the July to September cap, the average price of gas rises to 7.1 pence per kilowatt hour and electricity to 25.9 pence per kilowatt hour. Standing charges, the daily fee for being connected to the grid, also rise. Ofgem cited continued volatility in global wholesale gas markets, with the conflict in the Middle East named as the primary driver.
Gas hit harder than electricity
The increase is uneven. Gas unit rates rise by around 24 per cent while electricity rises by around 5 per cent. Households heating with gas will see the bigger impact. Cornwall Insight has forecast a further 2 per cent rise in the October cap, which would push annual bills toward £1,900 by the end of 2026.
Who is shielded
The cap only applies to households on standard or default variable tariffs. Ofgem estimates approximately 40 per cent of UK energy accounts (around 22 million households) are currently on fixed-term contracts and will not see the July rise during the term of their fix. Households on the cap can move onto a fixed deal at any time. Switching to a fix below the current cap is one way to avoid the July increase entirely.
Regional variation
The £1,862 figure is the national average. The cap is set separately for 14 supply regions, and actual bills depend on where the household is located, how much energy is used, and the payment method. Customers paying by standard credit (cash or cheque) typically pay more than those on direct debit. Prepayment customers pay a slightly lower headline rate after a 2024 government intervention.
Why bills are still rising despite global price falls
UK gas prices were below the EU average in the first half of 2025, but UK electricity prices have moved structurally higher and now exceed almost every EU country except Germany. The House of Commons Library notes that under the current direct debit cap the ratio of electricity to gas unit prices in the UK is higher than in any EU country. Network charges, renewable subsidies including Sizewell C, and falling overall demand pushing fixed costs onto fewer units of energy all contribute.
Debt Relief Scheme and household support
Ofgem has set out plans for a Debt Relief Scheme to support an estimated 195,000 households on means-tested benefits who are struggling with energy debt. The Warm Home Discount continues to operate. Households in difficulty can ask their supplier for a repayment plan or emergency credit, which suppliers are required to provide.
Frequently Asked Questions
How much will my bill go up?
The £221 figure is the average for a typical household using dual fuel. Actual increases depend on usage, payment method and supply region. Higher-than-average users will see larger increases.
When does the new cap take effect?
The new cap applies from 1 July 2026 to 30 September 2026. Ofgem will publish the October to December cap by late August 2026.
Can I avoid the rise by switching to a fix?
Yes if a fixed tariff is available below the current cap. Households should check fixed rates against the new July cap rather than the current April to June cap when comparing.
Will gas bills rise more than electricity?
Yes. Gas unit rates rise around 24 per cent under the July cap, while electricity rises around 5 per cent. Households heating with gas will see the largest increase.
How We Verified
Cap figures and regional information were taken from the Ofgem 27 May 2026 announcement and the published Annex 9 levelised cap rates model. Wider context on UK gas and electricity prices relative to the EU was sourced from the House of Commons Library research briefing CBP-9714, updated 28 May 2026.
