Millions of households across the UK will see their energy costs change from today (1 July) as a planned quarterly change to the energy price cap by regulator Ofgem takes effect.
It’s part of a system designed so that people can’t be charged too much for their electricity and gas, but this week’s rise is an inflation busting 13% over what we were paying in the previous quarter.
Ofgem has said that the rise is because of the big increase in the wholesale cost of gas due to the unease in the Middle East that started with the Americans bombing Iran in February with no plan past the first few days of bombardment. In short, making electricity is more expensive than it was before.
The current prices will be in place until the end of September, when Ofgem will announce new prices that will be in place for the final quarter of 2026.
What is the energy price cap?
The cap limits the amount that providers can charge per kilowatt-hour of domestic electricity and unit of gas, as well as the daily standing charge they can levy.
Customers on a default tariff who pay for their electricity by direct debit will pay an average of 26.11 pence/kWh, up around 1.6p. The daily standing charge is now 57.19 pence per day.
Those numbers are an average of prices across the UK and could be higher or lower depending on your circumstances.
An average annual household energy bill is now capped at £1,862, but because the cap changes each quarter, the yearly bill will change. Crucially, the current cap works out at £155 a month for the average house.
Will energy prices go down again?
Current forecasts are for prices to drop before the end of the year, but then no one expected them to rise so much in 2026. It's also worth remembering that prices were as high as 34p/kWh back in 2023.
The final quarter of the year is the important one with darker evenings and people putting their heating on as the weather gets colder. The current expectation is that the price cap will go down in September.
Why is my bill different to the cap?
Where you live can make a difference (standing charges are set for each different region of the UK based on a range of criteria), as does how you pay, what fuel you use and whether you’re an average of every household in the UK.
Ofgem has what it calls a ‘typical domestic consumption value’, that takes values from different parts of the energy market to create a value for an average home, so the numbers involved in the price cap publicity are a handy reference more than anything.
How is the price cap calculated?
Ofgem has to decide the price of energy based on the wholesale cost of making the electricity, a bit of money that’s put aside to maintain and upgrade the infrastructure and cover government policies like the warm homes discount, as well as allowing for a bit of profit for the suppliers themselves.
When is the price cap reviewed?
There are four reviews scheduled in each year, taking place in January, April, July and October. They are typically announced a month or two in advance so that energy providers have time to prepare.
Does the price cap affect electric car charging?
Let’s take a 60kWh EV as an example – a full charge at the default rate from April to June 2026 would have cost £14.80. That has now increased to £15.67. Still much cheaper than the same charge on an average 7kW public AC charger (55p/kWh), which would be £33, or an average DC rapid charge (80p/kWh) at £48.
Are EV tariffs still worth it?
Shopping around for a variable tariff is absolutely still worth it – some deals mean you can charge your electric car overnight during off-peak hours for as little as 8p per kWh, which would mean a full charge of our mythical 60kWh EV at £4.80.
Our expert Tom goes through the best deals regularly – check out his guide to the best EV electricity tariffs.
