2026 has already been an expensive year for everyone in the UK, with price rises virtually across the board. April in particular brought synchronised hikes with Council Tax bills going up alongside other bills like water and broadband. The cost of food in supermarkets has continued to climb, as has the cost of other everyday essentials - with a Barclays report saying 65% of homes are already cutting back in order to afford everyday expenses.
And there will be more shocks to come in July, with major changes to the money landscape. Here is what you need to know.
1. Energy Bills are Rising by 13% (July 1)
The biggest financial change hitting UK households next month is a sharp increase in household energy bills. Following a brief period of relief in the spring, the regulatory safety net is shifting upward. Ofgem has confirmed that the Energy Price Cap will rise to £1,862 per year for a typical dual-fuel household paying by Direct Debit. This is an increase of £221 compared to the current rate.
The increase is primarily being driven by rising global wholesale gas prices linked to ongoing tensions in the Middle East. If you are on a standard variable tariff (which applies to roughly 65% of UK homes who haven't locked in a deal), your unit rates will change as follows:
- Electricity: The unit rate is increasing from 24.67p per kWh to 26.11p per kWh. The daily standing charge will remain virtually flat at 57.19p.
- Gas: The unit rate is jumping more significantly from 5.74p per kWh to 7.33p per kWh. The daily standing charge will hold steady at 29.04p.
Remember: The £1,862 figure is just an illustrative average. The cap limits the price per unit, not your total bill. If you use more energy, you will pay more.
How Your Payment Type Affects the Change:
- Direct Debit / Monthly Bills: Your supplier will automatically adjust your rates on July 1. If your account is in healthy credit, your fixed monthly payment might not shoot up immediately, but your usage will cost more against that balance.
- Smart Pay-As-You-Go Meters: Your unit rates will update automatically on the morning of July 1.
- Traditional (Prepayment) Meters: The new, higher rates will kick in the very first time you top up your key or card on or after July 1.
- Fixed Tariffs: If you are currently locked into a fixed-rate contract, you are completely exempt from this hike until your current contract expires.
2. Hard Rules for Buy Now, Pay Later (BNPL) — July 15
If you use short-term financing apps like Klarna, Clearpay, or PayPal, the entire system is being legally restructured under the Financial Conduct Authority (FCA).
- Mandatory Hard Checks: Instead of just checking your affordability when you create an account, lenders will now have to run credit checks on every single transaction to make sure you aren't unsustainably stacking debt.
- Section 75 Safety Net: For any new BNPL agreement made from July 15 onwards on items valued between £100 and £30,000, your provider will be jointly liable with the retailer. If the company goes bust or the item is faulty, you can claim your money straight back from the finance provider—bringing apps to the exact same legal protection standard as traditional credit cards.
- No More Backdated Interest: Providers will be banned from the controversial practice of backdating interest to the original purchase date if you fail to clear your balance by the end of a 0% promotional window. You will only pay interest on what is left over.
3. Escalation Rights to the Ombudsman
Tied to the July 15 BNPL regulation, if you have a dispute over an order or payment timeline and your provider refuses to help, you will officially gain the right to escalate your complaint to the Financial Ombudsman Service. Up until now, users had very little legal recourse if a BNPL app handled a dispute unfairly.
4. Last Chance to Vote on New UK Banknotes — July 3
While not an immediate shift in what is in your bank account, the Bank of England's official public consultation on the redesign of the £5, £10, £20, and £50 notes closes at 11:59 PM on Friday, July 3. The Bank has confirmed it is replacing historical figures with UK wildlife and nature themes. If you want a say in which animals represent the home nations on future cash, your deadline to vote online is the first week of next month.
5. Motability Scheme Changes (July 1)
Significant changes to the Motability Scheme take effect for all new orders placed on or after 1 July 2026. These updates — driven by UK Government tax changes — include newly applied VAT and Insurance Premium Tax, reduced annual mileage allowances, higher excess fees, and stricter tyre limits. Existing agreements remain unaffected until you renew.
- From July, there will be 20% VAT on certain top-up payments for higher-end vehicles plus 12% Insurance Premium Tax on scheme insurance.
- The charge for exceeding your mileage limit increases from previous rates to 25p per mile (including VAT).
- The standard mileage allowance is lowered to 10,000 miles per year (down from 20,000). This means a standard 3-year lease includes 30,000 miles, and a 5-year Wheelchair Accessible Vehicle (WAV) lease includes 50,000 miles.
- Tyres are still included, but fair-use limits now apply. For a 3-year lease, a maximum of 6 replacements are included (with up to 4 for accidental damage).
- European breakdown cover is no longer automatically free. You must notify the RAC and pay an admin fee for a VE103 vehicle certificate before travelling abroad.
