Household finances are set for further strain as energy regulator Ofgem has confirmed the anticipated increase in the price cap. From July 1, the cap will rise by 13%, reaching £1,862 per year for a typical dual-fuel household paying by direct debit. This translates to an average increase of £18 per month compared to the current cap of £1,641.
Reasons for the Increase
Ofgem attributed the hike to higher wholesale gas prices, driven by the ongoing conflict in the Middle East. However, prices remain significantly below the peak of the energy crisis in 2022, when the Conservative government intervened to cap bills at £2,500.
Impact on Households
The price cap affects only households in England, Scotland, and Wales on standard variable tariffs (SVT) or default tariffs. Ofgem noted that 40% of accounts are on fixed tariffs and thus unaffected by this change.
Ofgem's chief executive, Tim Jarvis, stated: "Today's price change reflects continued volatility in global energy markets. 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."
Future Concerns
The price cap limits the amount suppliers can charge per unit of gas and electricity, meaning the total bill depends on actual consumption. Households are largely protected during warmer months, but concerns are mounting over a significant blow when the cap is reassessed in October, when energy demand rises as temperatures drop.
Calls have intensified for the government to outline support for the most vulnerable. However, Chancellor Rachel Reeves stopped short of announcing immediate energy measures in her cost-of-living plan.
Simon Francis from the End Fuel Poverty Coalition said: "Behind every energy price rise are households whose direct debits are about to rise, families whose energy debt is harder to clear, and pensioners whose summer is already overshadowed by the winter ahead. Meanwhile, the energy industry has posted more than £3bn in profits from its UK operations in the first three months of 2026. The government cannot wait until September to act. It must confirm what support will be available, address the fact that relying on gas for heating is a dead end as the North Sea runs dry, and chart a path for households to find a permanent way off the gas price roller coaster."
