Ofgem will announce the new energy price cap on 24 May, and the number will be higher than the current £1,690, likely by £60 to £80 for a typical household. That is the direct consequence of a 15% spike in wholesale gas prices since February, driven by escalating tensions between Iran and Israel.
As reported by the Romford Recorder, households will learn the exact rise in the coming weeks, but the trajectory is already clear. The cap has fallen from its 2022 peak of £4,279, but it has not returned to pre-crisis levels. This rise shows geopolitical risk is now a permanent fixture in UK energy pricing.
Why Iran matters to your gas bill
The UK imports about 5% of its gas directly from Qatar, but the global price is set on international markets. When Iran, which sits near the Strait of Hormuz, a chokepoint for 20% of the world’s LNG, threatens to disrupt shipping, traders price in risk. That feeds into the wholesale price Ofgem uses to set the cap.
The effect is measurable. In January, wholesale gas traded at around 70p per therm. By late April, it was above 80p. The cap formula tracks a six-month average of those prices, with a three-month lag. So the July cap will reflect the post-Iran-spike gas costs from January through March. The Energy Saving Trust estimates that every 10p per therm increase adds roughly £30 to the typical annual bill.
But, and this is the key, the cap is not a ceiling on your actual bill. It is a cap on unit rates and standing charges. If you use more, you pay more. The average household using 12,000 kWh of gas and 2,900 kWh of electricity will see the rise. A large detached house using 18,000 kWh could face an extra £100.
What you can do before July
Waiting for the cap announcement is a mistake. Here is the practical action plan for Axiom readers.
Lock in a fixed tariff now. The cheapest fixes on the market are currently around 5-6% below the April cap. That gap will widen after the July rise. Compare via Ofgem’s accredited sites, but check exit fees, some fixes charge £50-£75 per fuel if you leave early. If your current fix is ending, switch before 1 July.
Insulate before winter. The Great British Insulation Scheme offers free or subsidised loft and cavity wall insulation for low-income households, and partial grants for others. A typical semi-detached house can save £200-£300 a year on heating by topping up loft insulation to 270mm. The scheme runs until March 2026, but installer slots fill up fast in autumn. Apply now.
Check your EPC rating. A home rated EPC D or below is leaking money. The average D-rated property costs £1,000 more to heat per year than a C-rated one. Simple measures, draught-proofing, radiator reflector panels, a smart thermostat, can lift a rating by one band for under £500. The government’s ECO4 scheme covers some of these for eligible households.
Who qualifies for help, and who doesn’t
The Warm Home Discount will give £150 off electricity bills to 3 million low-income households from October. But the eligibility threshold is tight: you must be on Pension Credit or certain means-tested benefits. The 2 million households just above that line get nothing.
For them, the best defence is efficiency. A heat pump, installed under the Boiler Upgrade Scheme, costs £7,500 after grant, but that grant is first-come, first-served and resets each financial year. The 2025-26 allocation opened on 1 April and is already half claimed in some regions. Act by June or wait until 2026.
The catch is that many homeowners still think the price cap protects them. It does not. It only limits the rate, not the total. And with geopolitical risk baked into the market for the foreseeable future, the only real hedge is to use less energy.
Households on standard variable tariffs can compare fixed deals on the Ofgem-accredited Energy Saving Trust website from 1 June. Eligibility for the Great British Insulation Scheme runs through gov.uk. Apply before September to guarantee installation before winter.
Frequently Asked Questions
Yes. The cap covers both unit rates (per kWh) and standing charges (daily fixed fee). Standing charges have risen 30% since 2022, partly due to network cost increases. The July announcement will include a revised standing charge, typically around 60p per day for electricity and 30p for gas.
It depends on your roof and budget. A typical 4kW system costs £6,000-£8,000 and can save £300-£500 a year on bills, but payback is 12-15 years at current prices. With the price cap rising, the savings are better than a year ago, but the 0% VAT on solar installations ends in March 2027. If your roof is south-facing and unshaded, now is a sensible time to get quotes.
