Ofgem will announce the July price cap on 27 May, but the prediction is already in: £1,846 a year for a typical dual-fuel household. That is £108 more than the current April cap of £1,738, and £315 more than the October 2024 level. The figure, as reported by The Eco Experts, is based on wholesale gas and electricity futures. But the headline number masks a deeper problem: the cap is a ceiling, not a target. Most households on standard variable tariffs will pay within 5% of it. The real question is how to get off it.
Who pays the £1,846, and who doesn’t
The £1,846 figure assumes a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity a year. Ofgem uses this profile to set the cap. But your actual bill depends on your region: households in the North West and Scotland pay more on standing charges than those in London or the South East. The cap also varies by payment method, direct debit customers get a discount of roughly £50 a year compared to prepayment meters. The catch is that 8 million households are still on standard variable tariffs, according to Ofgem’s latest data. Fixed deals have returned, but many are only 2-3% below the cap. Switching now locks in a rate before July’s rise.
What £108 buys, and what it costs to avoid
£108 a year is the extra cost for the typical household. Over a year, that is about £9 a month, roughly the price of a takeaway coffee every two weeks. But the cumulative effect since 2021 is staggering: the cap has risen from £1,138 in October 2021 to £1,846 now, a 62% increase. The Energy Saving Trust estimates that improving a home from EPC band D to C can cut annual energy spend by £300-£600. That is three to six times the July rise. The maths changes when you factor in grants: the Boiler Upgrade Scheme offers £7,500 for a heat pump, and the Great British Insulation Scheme covers loft and cavity wall insulation for many homes. The payback period on a heat pump, after grant, is typically 8-12 years. On insulation, it is 2-4 years.
The policy gap, and what you can do now
But here is the tension: the price cap is built to protect consumers from sudden spikes, but it also dulls the incentive to invest in efficiency. When the cap was £1,138, a heat pump payback was 15 years. Now it is 10. Yet the government’s own Climate Change Committee says the UK needs 600,000 heat pump installations a year by 2028. Last year, the figure was 60,000. Two factors explain the gap: installer capacity and consumer awareness. The Energy Ombudsman received 28,000 complaints about energy suppliers in 2024, up 12% on the year before. Many were about billing errors after switching. The lesson: check your EPC, claim available grants, and fix your tariff before July. The cap will rise. Your bill does not have to.
Frequently Asked Questions
The figure is a prediction based on wholesale futures. Ofgem will confirm the actual cap on 27 May, and it could be slightly higher or lower depending on market movements. The trend is clear: prices are rising, not falling.
Switch to a fixed tariff now if you are on a standard variable deal, some fixes are 2-3% below the current cap. For longer-term savings, loft insulation (typically £300-£500, payback in 2 years) and a smart thermostat (about £200) are the most cost-effective upgrades before summer.
