The price cap will rise by £155 in July, the third increase driven by global gas markets in two years. The trigger this time is not a cold snap or a pipeline repair, but a US-Iran conflict that threatens shipping lanes in the Strait of Hormuz.
As reported by the Energy & Climate Intelligence Unit, the £155 figure assumes a typical 12,000 kWh gas-and-electricity household. If the conflict widens, that number could climb further. For UK homeowners, the message is blunt: your heating system is a hostage to events half a world away.
Who pays the price, and why it keeps rising
Ofgem’s price cap is recalculated every three months based on wholesale gas prices. The UK still generates around 40% of its electricity from gas, so any spike in the global LNG market hits household bills directly. The ECIU estimates that the current tensions could add roughly 8% to the cap from July, on top of the 5% rise already baked in for April.
That £155 is not a one-off. If the conflict disrupts supplies for more than a quarter, the October cap could rise again. Households on standard variable tariffs, about 28 million of them, have no hedge. Fixed deals exist but at rates that already price in geopolitical risk.
What it costs a typical 3-bed semi
Take a 3-bed semi in Manchester using 12,000 kWh of gas and 2,900 kWh of electricity annually. At current prices (around £1,690 under the January cap), the July rise would push the annual bill to £1,845. That is a 9% increase in six months. For a 4-bed detached using 18,000 kWh of gas, the extra could exceed £230.
The catch is that most of that increase goes straight to gas suppliers and their upstream contractors, not to your home’s efficiency. Insulating your loft (cost: typically £300–£500) would cut gas use by roughly 15%, saving about £50 a year at current prices, and more if prices rise further. A heat pump, costing £7,000–£13,000 after the Boiler Upgrade Scheme‘s £7,500 grant, could cut gas use by 80%, saving around £400 a year on bills even before the July rise.
What this means for your EPC and upgrade plans
An Energy Performance Certificate rates homes from A to G. Every £100 saved on bills through efficiency roughly corresponds to a 5-point improvement in the EPC score. The July rise makes that maths more compelling: a band D home (score 55) could reach band C (score 69) by adding loft insulation, cavity wall insulation, and a smart thermostat, costing around £2,000 in total but saving £200–£300 a year.
The government’s Great British Insulation Scheme offers free or subsidised insulation for low-income households, but only about 100,000 homes have been upgraded since its 2023 launch. The Boiler Upgrade Scheme, meanwhile, has funded just over 50,000 heat pumps, far below the 600,000 annual target set by the Climate Change Committee. Both schemes are open now, but take-up is hampered by installer shortages and confusion over eligibility.
What you can do before July
Households on standard variable tariffs can fix a deal now if they find a rate below the expected July cap. Compare tariffs on Ofgem’s accredited site. For those considering a heat pump, the Boiler Upgrade Scheme grant is available until 2028, but installers are booking into autumn 2025. Book a survey now. For insulation, check if you qualify for the Great British Insulation Scheme via gov.uk, eligibility is based on council tax band and household income.
The £155 rise is not inevitable; it is the market’s best guess. But waiting to see if it materialises means paying it. Every month of delay costs the typical household roughly £13 in additional exposure. Act now, and you lock in protection against the next geopolitical shock.
Frequently Asked Questions
No. The £155 figure is based on a typical 12,000 kWh gas-and-electricity home. Households that use more gas, such as larger detached homes or those with poor insulation, will see a proportionally bigger increase. Those who use less, such as flats or well-insulated homes, will see a smaller rise.
Yes, but fixed deals are currently priced above the January cap. You would pay more now to avoid the July rise. Compare offers on Ofgem's accredited comparison site; a 12-month fix at 1.5% above the current cap may still be cheaper than the July cap.
