On 27 May 2026, Ofgem announced the steepest price cap rise in over two years: from 1 July 2026, the cap for a typical dual-fuel household paying by Direct Debit rises 13.5%, from £1,641 to £1,862 a year. The jump is driven by wholesale gas prices, which have climbed sharply amid the conflict in the Middle East. Here's exactly what changes, what it means for your bill (the headline number is probably not your bill), and how to decide whether fixing a tariff now beats riding the cap.
What's happening on 1 July 2026
The price cap doesn't cap your total bill — it caps the unit rates and standing charges your supplier can charge on a standard variable tariff. The "£1,862 a year" figure is just what a household with typical consumption would pay at those rates. Use more energy and you'll pay more; use less and you'll pay less.
Ofgem reviews the cap every three months. The July–September level reflects the wholesale market in early 2026, when gas prices rose sharply on supply concerns. Roughly 60% of GB households are on capped variable tariffs, so this rise lands on most of the country automatically — no action required, and no action is exactly what suppliers are counting on.
The new rates vs today's rates
Here are the Great Britain average rates for Direct Debit customers, including VAT (your region's exact rates vary slightly):
| Rate | Apr–Jun 2026 (now) | Jul–Sep 2026 (new) | Change |
|---|---|---|---|
| Electricity unit rate | 24.67p/kWh | 26.11p/kWh | +5.8% |
| Electricity standing charge | 57.21p/day | 57.19p/day | −0.03% |
| Gas unit rate | 5.74p/kWh | 7.33p/kWh | +27.7% |
| Gas standing charge | 29.09p/day | 29.04p/day | −0.2% |
| Typical annual bill (dual fuel) | £1,641 | £1,862 | +13.5% |
Source: Ofgem price cap announcements, May 2026. Note the asymmetry — this is overwhelmingly a gas rise. Gas units jump almost 28%, electricity units rise about 6%, and standing charges barely move.
"£1,862" is not your bill: what the rise means for YOUR home
Because the rise is concentrated in gas, how hard it hits you depends on your fuel mix. Three worked examples at the new rates:
- Gas-heated family home (3,100 kWh electricity, 14,000 kWh gas): gas costs rise from £804 to £1,026 a year, electricity from £765 to £810. Total increase: roughly £267 a year — well above the headline 13.5%.
- Typical household (2,700 kWh electricity, 11,500 kWh gas): the textbook case — about £221 more a year, matching the £1,641 → £1,862 move.
- Electric-only flat (2,000 kWh electricity, no gas): your units rise 24.67p → 26.11p, costing about £29 more a year. This rise mostly passes you by.
To estimate your own increase, take the kWh figures from your latest annual statement and multiply: every 1,000 kWh of gas now costs about £15.90 more, and every 1,000 kWh of electricity about £14.40 more, than at today's rates.
Payment method matters too
The £1,862 figure is for Direct Debit, which gets the lowest capped rates. Prepayment meter rates are set slightly below Direct Debit under the current levelisation arrangements, while standard credit (paying by cash or cheque on receipt of a bill) is capped meaningfully higher — typically well over £100 a year more for typical use. If you're on standard credit and able to switch to Direct Debit, that change alone usually outsaves most energy-saving gadgets. Exact payment-method rates for your region are on Ofgem's unit-rates page.
Should you fix? A decision framework
A fixed tariff locks your unit rates for 12–24 months. Whether that beats the cap depends on one comparison people consistently get wrong: compare the fix against the JULY rates, not your current bill. A fix that looks 5% more expensive than today's prices may actually be cheaper than what you'll pay from 1 July.
Our rule of thumb:
- If a fix is priced below the July cap level for your usage, it saves money immediately — and shields you from any further rises in October and beyond.
- If a fix is priced at or slightly above the July level, you're buying certainty. Worth it if another rise would strain your budget; skip it if you can absorb volatility.
- Watch exit fees. A fix with no (or low) exit fees is a one-way bet: you keep the protection if prices rise, and can leave cheaply if prices fall.
With the gas-driven rise landing in July, fixes signed in June are being priced against the old cap for a few more weeks. That window is exactly when comparing is most worthwhile — compare dual-fuel tariffs, electricity-only, or gas tariffs against your own usage now.
Why standing charges barely moved
Standing charges cover network costs, supplier operating costs and policy costs — not wholesale energy. This rise is a wholesale-gas story, so the daily charges are essentially flat (57.19p/day electricity, 29.04p/day gas). That's cold comfort for low-usage households, who pay around £315 a year in standing charges before using a single unit — but it does mean cutting your usage actually cuts your bill at the full unit rate.
What might happen in October 2026?
Honestly: nobody knows, and you should treat confident forecasts sceptically. The October cap will be set by wholesale prices over the summer, which currently hinge on geopolitics. What you can control is locking in a known price (fix) versus staying exposed in both directions (variable). If you fix, prefer tariffs with low exit fees so a falling market doesn't trap you.
How to switch before 1 July — and what happens mid-switch
Switching supplier takes around five working days and your supply is never interrupted — it's the same gas and electricity through the same pipes and wires; only the billing changes. If your switch completes after 1 July, you simply pay the old capped rates until the switch date and your new tariff's rates after. There's no penalty for leaving a standard variable tariff at any time.
- Grab your annual kWh usage from a recent bill (or use Ofgem's typical values: 2,700 kWh electricity, 11,500 kWh gas).
- Compare tariffs against the July rates — not today's.
- Apply through the new supplier; they handle the switch, including notifying your old one. Take a meter reading on switch day.
Five things to do before 1 July — whatever you decide about fixing
- Submit a meter reading on 30 June (or as close as possible) if you don't have a smart meter. It draws a clean line between units billed at the old rates and the new ones, and is the single most effective way to avoid being over-billed across a rate change.
- Check your Direct Debit level. Suppliers will recalculate for the new rates, but they're slow. A 13.5% cap rise on a gas-heavy home justifies roughly a 13–16% Direct Debit increase — if yours jumps far more, challenge it; if it doesn't move, expect a balance to build over winter.
- Reclaim credit you're sitting on. If your account is more than a month's payment in credit going into summer (the low-usage season), you can ask for it back rather than lending it to your supplier interest-free.
- Get a smart meter booked if you've been putting it off. It unlocks the time-of-use tariffs that consistently undercut the cap for EV owners and heavy off-peak users, and it ends estimated billing.
- Run one comparison with your real kWh figures. Ten minutes, once a quarter, against the incoming rates. Even if you conclude the cap is your best option this quarter, you'll know rather than hope — and you'll notice the quarter that stops being true.
If you run a business, note the cap doesn't apply to non-domestic supply at all — business energy contracts are priced and negotiated separately, and the same wholesale pressures make summer 2026 a sensible moment to review yours.
Frequently asked questions
Does the price cap limit my total bill?
No. It caps the unit rates and standing charges. Your total bill is rates × your actual usage — high-usage homes pay more than £1,862, low-usage homes less.
How do I know if I'm on a capped tariff?
If you've never chosen a fixed deal — or a previous fix ended and you did nothing — you're almost certainly on your supplier's standard variable tariff, which is what the cap applies to. Your bill or app will name your tariff; anything called "standard" or "flexible" is capped.
Do different regions pay different rates?
Yes. The figures above are the GB average; each of the 14 supply regions has slightly different unit rates and standing charges, reflecting network costs. Your bill shows your region's exact rates.
I have a heat pump / EV — does the cap apply to me?
The cap applies to standard variable tariffs regardless of what you run on them. But if you have an EV or heat pump, specialist time-of-use tariffs (cheap overnight rates) often beat the cap substantially for your usage pattern — they're worth comparing before defaulting to a standard fix.
Should prepayment customers do anything?
Prepayment rates also change on 1 July. If you top up just before the change, the new rates still apply from 1 July via your meter's rate update. Smart prepay customers can compare and switch exactly like credit customers.
All rates from Ofgem's price cap announcements (27 May 2026) and apply 1 July – 30 September 2026, GB average, Direct Debit, including VAT. Regional rates vary. Worked examples computed at the published rates.
