UK Energy Bills Set to Rise 13% in July Under New Ofgem Cap

The BBC reported Wednesday that Ofgem, the UK energy regulator, has raised the energy price cap by 13% effective 1 July. Typical annual bills for dual-fuel direct-debit households will climb to £1,862 from £1,641. The increase covers roughly 33 million homes across England, Wales, and Scotland.

What the New Cap Means for Households

From 1 July through 30 September, gas unit rates will rise to 7.33 pence per kilowatt hour. That is up from 5.74p. Electricity rates will increase to 26.11p per kWh from 24.67p. Bills vary depending on usage, location, and payment method. Households on standard credit will face a typical annual bill of £2,005. Prepayment-meter customers will pay roughly £1,812.

Standing charges, the fixed daily connection fees, remain largely unchanged from the previous quarter. Direct-debit customers will pay around 57.19p per day for electricity and 29.04p for gas.

Background on the Energy Cap

The energy price cap has been a central feature of UK household budgets since the 2021-2022 energy crisis. Ofgem adjusts the cap quarterly, basing calculations on a “typical” household’s annual usage. The regulator has now updated its consumption assumptions downward. Its new baseline uses 9,500 kWh of gas and 2,500 kWh of electricity per year. Previously it used 11,500 kWh and 2,700 kWh respectively. That revision reflects years of households cutting back and improved energy efficiency across the housing stock.

Also Read: What Is the Ofgem Energy Price Cap and How Does It Work?

Iran Conflict Drives Wholesale Energy Surge

Ofgem interim chief executive Tim Jarvis told the BBC that disruption to global energy markets from the ongoing Iran conflict could persist longer than first anticipated. Wholesale oil and gas prices spiked sharply after the United States and Israel struck Iran in late February. Iran subsequently restricted oil flows through a key regional corridor, amplifying the supply shock. Jarvis said the regulator is monitoring the situation closely as it looks ahead to the autumn 2026 cap review.

Campaigners have renewed calls for structural reform. Charities and consumer groups argue standing charges place a disproportionate burden on low-usage households. Ofgem has proposed allowing suppliers to offer a low-standing-charge tariff with higher unit rates. Critics say that merely shifts costs rather than reducing them.

Households with smart meters do not need to submit readings when the cap changes. Those on traditional meters are urged to log a reading on or around 1 July to avoid estimated charges at the wrong rate.

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