Energy bills to jump over £200 a year from July as Ofgem price cap rises 13 per cent

Millions of households will pay more than £200 extra a year on their bills from July.

The new cap, announced by Ofgem, is based on the average energy unit rate and standing charge paid by customers in England, Scotland and Wales.

While the figure reflects annual costs, the amount households actually pay will depend on how much energy they use.

The regulator said the increase has been driven by higher wholesale gas prices, which have been pushed up by ongoing conflict in the Middle East.

Customers will see a much steeper rise in gas costs than electricity costs. Ofgem said gas bills are increasing by around 24 per cent, while electricity bills will rise by about five per cent.

For a typical household paying by Direct Debit for gas and electricity, annual energy costs will rise from £1,641 to £1,862 when the new price cap takes effect in July.

The £221 increase is equivalent to around £18 extra a month and represents a rise of approximately 13 per cent.

Tim Jarvis, chief executive of Ofgem, said: “Today’s price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy.

“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. Smart meter customers can also take advantage of half price or cheap electricity at the weekends.”

He added: “While our energy supplies remain secure, the best way to limit this exposure is by investing in our energy network.

“That’s why we’re unlocking the funding needed for the biggest transformation of our lifetime to deliver a system that is secure, resilient and works for consumers across Great Britain.”

Cornwall Insight’s forecasts suggest the cap in October will be at a similar level to July, even if the Middle East conflict were to end soon, due to the physical damage to infrastructure and lingering effect of disrupted supply.

Calls have been mounting for the Government to set out action to support the most vulnerable, but Chancellor Rachel Reeves stopped short of any immediate energy measures in her cost-of-living plan.

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She told MPs last week: “We stand ready to act if market conditions worsen significantly later this year and I have been leading cross-Government contingency work on design of potential future targeted and temporary support for businesses.”

The energy price cap limits the maximum rates suppliers can charge for gas and electricity, rather than placing a cap on a household’s total bill.

This means families still pay for the energy they use, with higher consumption resulting in higher costs.

Many households have not yet felt the full impact of rising wholesale energy prices.

The current cap, which came into force in April, was around seven per cent lower than the previous level, helping to ease pressure on bills.

However, that respite is set to end when the new cap takes effect in July. Although lower energy use during the warmer summer months may soften the immediate impact, concerns are mounting over what could happen later in the year.

Experts have warned that households may face a more significant squeeze if energy prices remain elevated when the cap is reviewed again in October, just as colder weather increases demand for heating and pushes consumption higher.

Energy Secretary Ed Miliband described the increase as “deeply unwelcome news” for households, blaming higher energy costs on the conflict in the Middle East and wider volatility in global fossil fuel markets.

He said: “The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country.

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We know people were under pressure before this crisis and that’s why easing that burden is our number one priority. “

The Government said it is taking steps to ease pressure on household finances, pointing to the extension of the Warm Home Discount scheme to around six million families, alongside measures announced by the Chancellor including a fuel duty freeze and free bus travel for children in England during August.

Mr Miliband said ministers would continue to monitor developments ahead of winter and prepare for a range of scenarios if wholesale energy prices remain elevated.

He argued that the long-term solution to volatile bills is reducing Britain’s reliance on international fossil fuel markets through greater investment in domestic clean energy generation and improvements to home energy efficiency.

Simon Francis, coordinator of 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 £3 billion in profits from its UK operations in the first three months of 2026.”

He warned that higher bills over the summer could leave many households with little opportunity to pay down existing energy debts or build up savings before winter arrives.

Mr Francis added: “We are also worried that energy firms will now factor higher costs into direct debit calculations, meaning many households will feel the financial impact of winter long before October.”

He said forecasts suggesting the October price cap could remain at a similar level risk leaving millions of households facing “an extremely difficult year ahead” if additional support is not introduced.