Avoid the £1,862 energy trap from July 1

Ofgem will raise the energy price cap by £63 in October 2025, the third increase this year. But that modest headline figure masks a far bigger threat: households on default tariffs could end up paying £1,862 more annually if they fail to switch before July 1.

As reported by the Daily Express, the warning comes from energy analysts who say the gap between the cheapest fixed-rate deals and standard variable tariffs (SVTs) is widening fast. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity, that gap now exceeds £1,800, enough to turn a manageable winter into a financial crisis.

Who qualifies, and who doesn’t

The £1,862 figure applies to households on SVTs who have not switched supplier or tariff in the past 12 months. That’s roughly 11 million UK homes, according to Ofgem data from March 2025. If you are on a fixed deal that expires on June 30, you will automatically roll onto your supplier’s SVT unless you act.

Prepayment meter customers are not immune either. While the cap on prepayment meters is slightly lower, the differential between the cheapest fixed deals and the default rate is still around £1,400. The Energy Saving Trust warns that vulnerable households, older people, those on low incomes, and renters, are most likely to be hit because they switch least often.

What it costs a typical 3-bed semi

Take a household in a 3-bed semi in the Midlands using average consumption. On the current price cap (July to September 2025), their annual bill is roughly £1,736. The cheapest 12-month fixed deal available today is around £1,548, a saving of £188. But if they do nothing and roll onto the SVT after July 1, their annual cost jumps to £1,736 plus the October increase of £63. That makes it £1,799. Meanwhile, the cheapest fixed deal could rise to £1,620 or more as suppliers adjust. The gap is real and growing.

But, and this is the catch, not all fixed deals are created equal. Some include exit fees of £50–£75 per fuel, which can wipe out savings if you need to move or switch early. Others lock you in for 24 months, which may not suit households expecting a move or a change in circumstances. Always check the terms before signing.

How to avoid the trap, and by when

The deadline is July 1, when many current fixed deals expire and suppliers begin rolling customers onto SVTs. Here’s what to do now:

• Check your current tariff end date on your latest bill or online account.
• Compare fixed-rate deals on a comparison site accredited by Ofgem’s Confidence Code.
• Look for a 12-month fix with no exit fees or low exit fees (under £30 per fuel).
• Switch before June 25 to ensure the new tariff starts before July 1.

Households on SVTs can switch at any time without penalty. Those on fixed deals expiring soon should set a calendar reminder for three weeks before the end date. The switch itself takes about 21 days, so early action is essential.

One final note: the £1,862 figure assumes a worst-case scenario where you stay on the SVT for a full year. In reality, you can switch at any point. But the longer you wait, the more you pay. Ofgem’s own data shows that 40% of households have never switched supplier, a statistic that costs the average non-switcher £300 a year. Fixing now could save you hundreds, and protect you from further cap rises expected in January 2026.