Energy bills set to jump 13% in July as price cap climbs back above £1,860

Households across England, Scotland and Wales are bracing for a sharp rise in energy bills after the regulator confirmed that the price cap will increase by 13% from 1 July. The change pushes the cap for a typical household to around £1,862 a year, an increase of roughly £221, undoing much of the relief delivered by a fall earlier in the spring.

The rise will hit just as the summer arrives, and although usage is typically lower in the warmer months, the increase will feed straight into the higher bills households face when the heating goes back on in the autumn. For many families already stretched, the news is an unwelcome reversal of the downward trend seen at the start of the year.

Officials attributed the increase primarily to higher wholesale gas prices, which have climbed on the back of renewed tension in the Middle East, a reminder of how exposed British bills remain to events far beyond the country's borders.

What is changing and why

The price cap, which limits the rate suppliers can charge per unit of gas and electricity rather than capping the total bill, is recalculated every three months to reflect movements in wholesale costs. The latest rise follows a period of relative calm and undoes the saving of around £117 that households on direct debit enjoyed in the spring.

Notably, the increase is uneven between fuels. Electricity prices are rising by only around five per cent, while gas bills are set to climb by roughly a quarter, reflecting the dominant role of gas in setting wholesale prices and the renewed pressure on global supplies.

“We know any increase is unwelcome, particularly for those who are struggling. This rise is driven by international gas prices that are outside our control, but we remain focused on protecting consumers and pushing for a fairer, more stable market.”

Still below the crisis peak

For all the pain of the increase, officials were keen to stress that bills remain well below the heights reached during the energy crisis of 2022, when the Government had to step in and cap typical bills at £2,500 to shield households from even steeper rises. The current cap sits comfortably beneath that emergency level.

That context offers cold comfort to many, however, as average bills remain far higher than they were before the crisis began, and the absence of the broad government support that cushioned the worst of 2022 and 2023 means households are now far more exposed to each quarterly swing.

• The price cap rises 13% from 1 July, adding around £221 to a typical annual bill.
• The new cap stands at roughly £1,862 for a typical household.
• Gas prices are rising about 24% while electricity rises around 5%.
• The increase reverses much of the £117 saving seen in the spring.
• Bills remain below the £2,500 emergency cap set during the 2022 crisis.

How to soften the blow

Energy experts urge households to check whether a fixed deal now beats the new cap, as a small but growing number of competitive fixed tariffs have returned to the market and can offer certainty against further rises. Submitting a meter reading before the new rates take effect ensures households are not charged the higher rate for energy used before the change.

Those who are struggling are encouraged to contact their supplier, which is obliged to offer support such as payment plans, and to check their eligibility for grants, the Warm Home Discount and other assistance schemes designed to help with bills.

“Take a meter reading on the last day of June so you are not overcharged, and have a proper look at the fixed deals on offer. For some households, locking in now could save money and bring peace of mind.”

Background

The price cap was introduced to protect customers on standard variable tariffs from being overcharged, but during the energy crisis it became the mechanism through which soaring wholesale costs were passed on to consumers. Bills surged to record levels in 2022 before the Government intervened with emergency support that has since been withdrawn.

Since then the cap has moved up and down each quarter in line with volatile wholesale markets, leaving households facing repeated uncertainty about what they will pay from one season to the next.

What happens next: analysts will watch wholesale gas prices closely for signs of where the cap heads in the autumn, when colder weather drives consumption higher. Much will depend on the trajectory of the Middle East conflict and on global gas supplies as Europe begins to refill storage ahead of winter.