Ofgem Energy Price Cap July 2026: 13% Rise to £1,663 - What It Means for Your Bills

The Office of Gas and Electricity Markets confirmed on 27 May 2026 that the default-tariff energy price cap will rise by 13% from 1 July 2026, the third upward move of the post-energy-crisis era and the largest in twelve months. For a typical household paying by direct debit on the new Typical Domestic Consumption Values, the annual bill becomes £1,663 a year. On a like-for-like basis against the current £1,641 cap, the figure is £1,862, an annual increase of around £221 or £18 a month.

Around 33 million domestic accounts on standard variable tariffs are affected by the change. Roughly 21 million accounts on fixed-rate deals are not, until those contracts expire. The next quarterly cap, covering 1 October to 31 December 2026, will be published by 26 August 2026.

The new July to September 2026 cap rates in detail

For a customer on a standard variable tariff paying by direct debit, the new average rates from 1 July are 26.11 pence per kilowatt hour for electricity, with a daily standing charge of 57.19 pence, and 7.33 pence per kilowatt hour for gas, with a daily standing charge of 29.04 pence. All figures are GB averages and include VAT at 5%. Regional unit rates and standing charges vary, and Ofgem publishes a regional breakdown alongside each cap update.

The 13% headline figure conceals an unusual split between fuels. Electricity unit rates rise around 5%, while gas unit rates rise around 24%. The asymmetry reflects the increasing share of renewable generation on the GB electricity system, which reduces the marginal cost link between gas and power. During the 2022 energy crisis, electricity and gas typically moved together and in lockstep with European gas prices. The structural change since then is real, even if a 24% jump in the gas unit rate will be hard to feel as good news.

Why prices are rising this quarter

Ofgem attributes the move primarily to wholesale gas prices, which rose around 28% over the three months to early May 2026. The proximate driver is ongoing conflict in the Middle East, which has tightened LNG supply into Europe and pushed forward gas curves higher across the summer window. The cap is set with reference to a defined wholesale observation window before each quarter; the higher gas costs paid by suppliers during that window now flow through to consumer bills from 1 July.

The cap remains 54% below the height of the 2022 energy crisis. Adjusted for inflation, the new level is around 6% higher than the same period in 2025. In nominal terms it sits roughly £2,197 below the peak that prompted government intervention three years ago, when the cap had reached £3,549 and the state stepped in to limit bills at £2,500. The structural backdrop is meaningfully better than 2022, but volatility is back.

Who is affected, and who is not

The price cap applies to customers on default tariffs, also known as standard variable tariffs. As of late May 2026, around 33 million domestic accounts sit on these tariffs and will see the new rates from 1 July. Of those, roughly 19 million pay by direct debit, around 7 million pay by standard credit on receipt of bill, and around 6 million use prepayment meters.

Around 21 million accounts are on fixed-rate tariffs and are not affected by the cap change for the duration of the fix. If a fix expires before October 2026, the account will roll onto the default tariff at the new cap level unless the customer takes action. Anyone with a fix ending between now and the autumn should compare their supplier's renewal offer against the new cap before the deal lapses to default.

What households should do before 1 July

The cap is a ceiling, not a target. Fixed deals priced below the cap are now widely available and become more competitive as the cap rises. Households should compare available fixes to their projected July to September usage, particularly anyone heading into the autumn on a default tariff. The price comparison process is straightforward and switching is free.

Payment method matters more than many households realise. Ofgem highlights that customers on standard credit (paying by cash, cheque, or card on receipt of bill) could save around £143 a year on average by moving to direct debit on the same tariff. Smart meter customers may also have access to weekend or off-peak tariffs that price electricity at half the standard rate during specified hours, which can produce meaningful savings for households with flexible consumption.

Anyone struggling to pay should contact their supplier before missing a payment. Suppliers are required by Ofgem's rules to offer support, which can include tailored repayment plans, hardship fund referrals, and signposting to debt advice. Engaging early gives the supplier more options.

Warm Home Discount and other support schemes

The Warm Home Discount provides a one-off £150 rebate to eligible low-income households, applied to electricity bills between October and March. Eligibility is tied to receipt of certain qualifying benefits and to property characteristics including a low energy efficiency rating. Applications for the relevant cohort open in autumn each year; the scheme is delivered through energy suppliers and most eligible households are identified automatically without needing to apply.

Cold Weather Payments of £25 per qualifying week become available between November and March in areas where the local weather station records seven consecutive days of average temperature at or below 0°C. The scheme runs in parallel with Warm Home Discount and is administered by the Department for Work and Pensions. Both schemes are separate from the cap and are not affected by today's announcement.

When the next cap is announced and what to watch

Ofgem reviews and resets the cap every three months. The next level, covering 1 October to 31 December 2026, will be published by 26 August 2026 (Ofgem may publish earlier if external factors require). The October to December window is the historically critical one for households, as cap moves into the heating season produce the largest absolute impact on quarterly bills.

The variable that drives the October cap is the wholesale gas observation window running through summer 2026. If Middle East tensions ease and European gas storage refills cleanly, the October cap could move lower again. If supply remains tight, October could see a further rise on top of today's 13%. The same announcement window will also confirm how the new Bill Discount Scheme, on which Ofgem is consulting through summer 2026, is reflected in cap calculations from October onward.

Frequently asked questions

By how much is the energy price cap rising in July 2026?

Ofgem confirmed on 27 May 2026 that the default-tariff cap rises by 13% from 1 July 2026, taking a typical dual-fuel direct-debit bill to £1,663 a year on the updated Typical Domestic Consumption Values, or £1,862 on a like-for-like basis against the current £1,641 cap.

What are the new unit rates and standing charges from 1 July 2026?

For a standard variable direct-debit customer, the new GB-average rates are 26.11 pence per kWh for electricity with a 57.19 pence daily standing charge, and 7.33 pence per kWh for gas with a 29.04 pence daily standing charge. All figures include VAT at 5%. Regional rates vary.

Why is electricity rising less than gas?

Electricity unit rates rise around 5% while gas unit rates rise around 24%. The split reflects the larger share of renewable generation on the GB electricity system, which reduces the marginal cost link between gas and power compared to the 2022 energy crisis.

I am on a fixed tariff. Am I affected?

Customers on fixed-rate tariffs are not affected by the cap change for the remainder of their fix. Around 21 million domestic accounts are on fixed deals. If a fix ends before the new cap, the account rolls onto the default tariff at the new level unless the customer takes action.

When does Ofgem announce the next cap?

The cap for 1 October to 31 December 2026 will be published by 26 August 2026. Ofgem may publish earlier if external factors require.

What should I do now?

Compare available fixed-rate tariffs against the new cap level and your projected July to September usage. Customers paying by standard credit could save around £143 a year on average by moving to direct debit. Anyone struggling to pay should contact their supplier before missing a payment.