The energy price cap will jump by 20% in July, the steepest single increase since the crisis peak of 2022. Cornwall Insight, the analyst firm that tracks wholesale energy markets, published the forecast this week, as reported by Solar Power Portal. The news lands days after Ofgem confirmed the current cap at £1,690 for a typical dual-fuel household. A 20% rise would push that figure to roughly £2,028, a jump of £338 a year, or about £28 a month.
Who qualifies, and who doesn’t
Every household on a standard variable tariff, some 28 million in England, Scotland and Wales, will see the increase. Prepayment meter customers, who already pay slightly less under the cap, will also face the same percentage rise. The catch is that fixed-rate deals, which some homeowners switched to in early 2025, are now ending. Those households will roll onto the capped variable tariff at the new higher rate unless they act before July.
What it costs a typical 3-bed semi
Ofgem’s typical consumption figures assume 12,000 kWh of gas and 2,900 kWh of electricity a year. On the current cap, that costs £1,690. At £2,028, the extra £338 covers roughly the same energy as running a 3.5 kW heat pump for 96 hours. But the real sting is in the standing charge: network costs, which make up about 25% of the bill, are rising too. Cornwall Insight estimates network charges will add another £20 to the annual standing charge for most regions.
What this misses, the insulation gap
Yet the price cap rise is only half the story. The government’s own data shows the average UK home loses heat three times faster than a well-insulated one. Loft insulation to 270 mm costs about £300 to £400 for a typical semi and saves roughly £180 a year on heating. Cavity wall insulation runs £1,500 to £2,000 but saves £200 to £300 annually. The Great British Insulation Scheme offers free or subsidised installations for low-income households, but take-up has been slow, with only 12,000 homes upgraded in the first six months.
What to do, and by when
Households on standard variable tariffs can switch to a time-of-use tariff, such as Octopus Energy’s Agile or EDF’s GoElectric, which charge lower rates overnight. A smart meter is required, installation is free via your supplier. For those considering solar panels, the payback period has shortened: a 4 kW system costs around £6,000 and saves £300 to £400 a year on electricity, meaning a 15-year payback even before the cap rise. The Smart Export Guarantee pays 5–15p per kWh for exported power.
Check eligibility for the Great British Insulation Scheme at gov.uk before 31 March 2026. Apply for a smart meter through your supplier, appointments are typically available within four weeks. For homeowners with expiring fixed deals, compare tariffs on Ofgem’s accredited comparison sites immediately.
Frequently Asked Questions
No. Households on fixed-rate deals that started before April 2025 are protected until their contract ends. Those on standard variable tariffs or prepayment meters will see the full 20% increase from July. Regional differences also apply: customers in the North West and Scotland typically pay slightly higher standing charges.
Yes. The Great British Insulation Scheme covers up to 100% of costs for low-income households. For others, the Energy Company Obligation (ECO4) provides free insulation for those on certain benefits. Even without grants, loft insulation pays for itself in under three years at current prices.
