Energy Price Cap rise in July: what it costs and what to do now

The energy price cap will rise by £63 in July, the third increase in 18 months. That pushes a typical dual-fuel bill to around £1,850 a year, according to forecasts compiled by analysts and reported by Money Saving Expert. For the 28 million households on standard variable tariffs, that is real money, roughly £5.25 a month extra from 1 July.

Who qualifies, and who doesn’t

The price cap applies to households on default or standard variable tariffs in England, Wales, and Scotland. It does not cap the total bill, it caps the unit rate for gas and electricity, plus standing charges. A typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity will see the biggest impact. Homes with electric heating (storage heaters or direct electric) face a proportionally larger hit because electricity unit rates are rising faster than gas. Ofgem confirmed the methodology in its February 2025 consultation. The catch is that households on fixed-term deals are not protected by the cap, many fixed tariffs are now priced above the cap level anyway.

What it costs a typical 3-bed semi

Using the industry-standard consumption profile: 12,000 kWh gas, 2,900 kWh electricity. The July cap is forecast at 25.4p/kWh for electricity and 6.2p/kWh for gas, with a standing charge of 60p/day for electricity and 31p/day for gas. That works out to roughly £1,850 a year, up from £1,787 in April. The increase comes entirely from wholesale gas costs, which have risen 12% since February. Network charges, policy costs, and supplier margins remain flat. Energy Saving Trust data shows that a typical semi with cavity wall insulation saves about £285 a year on heating. Draught-proofing adds another £60. Combined, those two measures offset the entire July rise.

What to do before July 1

First, check your current tariff. If you are on a standard variable tariff, you can switch to a fixed deal, but only if the fixed rate is below the new cap. Several fixed tariffs are now available at 23p/kWh for electricity, which is below the cap. Second, apply for the Great British Insulation Scheme if you have less than 100mm of loft insulation. The scheme covers up to 100% of costs for low-income households and 50% for others. Third, consider a heat pump if your boiler is more than 15 years old. The Boiler Upgrade Scheme offers £7,500 off installation, and running costs are roughly 20% lower than a gas boiler at current prices. But do not rush: installers are booked into September in most regions. The smart move is to book a home energy assessment now, before the July price rise kicks in.

The long-term play

Each 1p/kWh rise in the electricity unit rate adds about £29 a year to a typical bill. The July rise is 1.2p/kWh. Over three years, the cumulative increase could exceed £200. Solar panels, at roughly £6,000 installed for a 4kW system, generate about 3,500 kWh a year in the south of England, enough to offset the electricity cost increase for a decade. Battery storage adds another £4,000 but allows you to use cheap off-peak rates from time-of-use tariffs. The payback period for solar is now under 10 years in most regions, and falling. The price cap rise is a nudge to act. Households that do nothing will pay more. Those that invest in efficiency and generation will lock in lower costs for years.