What this guide covers
This guide explains the July 2026 Ofgem energy price cap change, what the new rates will be, and what it means for household energy bills. It is educational information only.
Utility Matchmaker is an information and referral service. For live tariffs at your postcode, use the partner comparison tool.
What is happening on 1 July 2026?
On 1 July 2026, Ofgem's energy price cap will rise by 13.5% for a typical dual fuel household paying by direct debit. The new cap level will be £1,862 per year, up from £1,641 in the April to June 2026 period. This will be an increase of £221 per year, or approximately £18.40 per month, for a household using typical amounts of gas and electricity.
The cap was announced by Ofgem on 27 May 2026 and will apply from 1 July to 30 September 2026. When it takes effect, it will be the highest level the cap has been since the 2022 to 2023 energy crisis, when it reached £3,280 at its peak.
Why is the price cap rising?
The July 2026 increase is driven primarily by rising wholesale energy prices. Global wholesale gas prices rose sharply from late February 2026 following the outbreak of the US-Iran conflict and the effective disruption of the Strait of Hormuz, a critical shipping route for liquefied natural gas (LNG). Higher wholesale costs are fed into the cap calculation and passed on to households on standard variable tariffs.
The price cap calculation is based on a three-month assessment window of wholesale prices. Because prices were elevated during the assessment period for the July cap, the resulting cap level reflects those higher costs.
What will the new unit rates be from July 2026?
The national average rates under the July 2026 price cap for direct debit customers will be:
These are national averages. Your actual rates will depend on your distribution network region. Regional rates vary slightly due to differences in local network costs.
For your specific regional rates, see the price cap rates by region tool.
- Electricity unit rate: 26.11p per kWh
- Electricity standing charge: 57.19p per day
- Gas unit rate: 7.33p per kWh
- Gas standing charge: 29.04p per day
How much will my bill increase?
The £1,862 annual figure is based on Ofgem's typical domestic consumption values of 2,700 kWh of electricity and 11,500 kWh of gas per year, paying by direct debit.
Your actual bill increase will depend on how much energy you use. Higher-usage households will see a larger cash increase. Lower-usage households will see a smaller one.
To estimate your personal annual cost at the new cap rates, use the annual bill estimator below.
These are rough guides only. Your actual cost depends on your usage, meter type, payment method, and region.
- A one-bedroom flat (electricity only, no gas): approximate annual cost at July 2026 rates of £450 to £600
- A two-bedroom flat or small terraced house (dual fuel): approximate annual cost at July 2026 rates of £1,200 to £1,500
- A three-bedroom semi-detached house (dual fuel): approximate annual cost at July 2026 rates of £1,700 to £2,100
- A larger detached property (dual fuel, higher usage): approximate annual cost at July 2026 rates of £2,500 or above
Does the cap limit my total bill?
No. This is the most commonly misunderstood aspect of the price cap. The cap sets the maximum unit rates and standing charges suppliers can apply to standard variable tariffs. It does not limit your total bill. If you use more energy than Ofgem's typical consumption level, you will pay more than £1,862.
The £1,862 headline figure is a benchmark for comparison. It helps you understand whether your bill is broadly in line with what a typical household would pay at the new cap rates from July 2026.
Who will the price cap affect from July 2026?
The July 2026 cap will apply to domestic customers on standard variable tariffs (SVTs). This includes:
The cap does not apply to fixed tariff customers during their contract period. If you are on a fixed deal, your unit rates and standing charges are set by your contract, not by the cap. The cap will apply again if you move to a variable tariff after your fixed deal ends.
- Customers who have never actively chosen a tariff and are on their supplier's default rate.
- Customers whose fixed deal has ended and who have rolled onto their supplier's SVT.
- Customers who switched to a variable tariff deliberately.
What about prepayment meter customers?
Prepayment meter customers on standard variable tariffs will be subject to the same cap rates as direct debit customers following Ofgem's equalisation of prepayment and direct debit rates in April 2024. The July 2026 prepayment cap rates will be slightly lower than the direct debit rates shown above due to differences in the standing charge structure.
What is the October 2026 forecast?
The price cap is reviewed quarterly. The October 2026 to December 2026 cap will be announced by Ofgem by 26 August 2026, based on wholesale prices during the assessment period from 19 May to 18 August 2026.
Cornwall Insight, an energy consultancy with a strong forecasting track record, forecasts the October 2026 cap at approximately £1,899 per year under the current Ofgem consumption values. This would represent a further increase of approximately £37 above the July level.
Forecasts at this stage carry significant uncertainty. Wholesale prices remain volatile due to ongoing Middle East tensions. If wholesale prices fall before the assessment window closes, the October cap could come in lower than forecast. If they remain elevated or rise further, the cap could be higher.
Note: all cap forecasts are estimates only and should not be treated as confirmed figures.
Can I avoid the July 2026 increase?
The price cap only applies to standard variable tariffs. Fixed tariffs are not subject to the cap during the fixed period. A household that switches to a fixed tariff before or shortly after 1 July 2026 at a rate below £1,862 would pay less than the cap level for the duration of their fix, regardless of how the cap moves in subsequent quarters.
Fixed tariffs were available below the July 2026 cap level in June 2026 from several suppliers. Whether a fixed deal remains the better financial outcome depends on where the cap goes in October and beyond.
For a detailed analysis of whether fixing makes sense given current forecasts, see the related guide below.
What to do now
Check your current tariff. Log into your supplier account or check a recent bill to confirm whether you are on a standard variable tariff or a fixed deal. If you are on a fixed deal, check when it ends.
Compare tariffs at your postcode. Use the partner comparison tool to see what fixed and variable tariffs are currently available at your address. Tariff availability and pricing change regularly.
Use the annual bill estimator. Enter your annual usage figures to see your estimated cost at the new cap rates and compare against available fixed tariffs.