The price cap will rise by £63 on July 1, the second increase this year, pushing the typical dual-fuel direct debit bill to £1,849. That’s £5.25 a month more for a 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity. The news, as reported by Daily Express, comes as households already face the highest energy costs in Europe after Iceland.
Why the cap is rising again
Ofgem blamed the increase on higher wholesale gas prices and rising network charges. Wholesale gas alone accounts for about 47% of the typical bill, and the forward market for summer delivery has crept up 8% since the last cap announcement. Network charges, the cost of pipes, wires, and smart meter infrastructure, add another £24 a year to the average electricity bill. The regulator’s own data shows that supplier margins remain flat at roughly 1.9%, so this isn’t a profit grab.
What it costs a typical 3-bed semi
The cap applies to the unit rates and standing charges for households on standard variable tariffs. For a 3-bed semi with typical consumption, the new rates mean:
- Electricity unit rate: 27.4p per kWh (up from 26.1p)
- Gas unit rate: 6.9p per kWh (up from 6.5p)
- Standing charge: 56p per day for electricity, 31p per day for gas
That adds up to £1,849 a year. But the figure assumes a household using exactly the typical 12,000 kWh of gas and 2,900 kWh of electricity. If you use 15,000 kWh of gas, you’ll pay closer to £2,050. The Energy Saving Trust estimates that a poorly insulated D-rated home uses 20% more gas than an EPC C home of the same size.
Who qualifies for help, and who doesn’t
The Warm Home Discount will continue this winter, giving £150 off electricity bills for low-income households. But the eligibility threshold has not changed since 2022, so many pensioners on modest incomes still miss out. The government’s Energy Price Guarantee ended in March 2024, meaning the cap is now the only protection. Households on prepayment meters pay slightly less, about £10 a year, but still face the same percentage increase.
Yet the cap is a blunt instrument. It protects nobody from the underlying cost of gas, which remains the dominant fuel for UK heating. The catch is that every £10 rise in wholesale gas prices adds roughly £80 million to the national energy bill. Until the grid decarbonises, homeowners are exposed to global gas markets, and the next price shock could come from anywhere.
What homeowners can do now
The July rise is locked in, but the October cap could fall if wholesale prices soften. Ofgem will announce the next level in August. In the meantime, households can cut consumption directly. Loft insulation to 270mm saves about £180 a year on a gas-heated semi. Cavity wall insulation saves another £250. Both qualify for the Great British Insulation Scheme, which offers grants of up to £1,500 for low-income homes. Switch to a heat pump and you could save £400 a year on heating, but the upfront cost is typically £7,000 to £13,000 after the Boiler Upgrade Scheme grant.
Check your EPC rating on gov.uk. If you’re below a C, you’re paying a premium. The government’s own figures show that moving from EPC D to C cuts average bills by £200–£300 a year. That’s a saving that no price cap can match.
Households on standard variable tariffs can switch to a fixed deal, some are now cheaper than the cap. Compare offers on Ofgem-accredited sites by mid-June to lock in a rate before July. Eligibility for the Warm Home Discount opens in July. Apply through your supplier if you receive Pension Credit or certain means-tested benefits.
Frequently Asked Questions
The new cap applies from July 1, 2025. Your bill will reflect the new unit rates and standing charges from your first meter reading after that date.
Yes, some fixed tariffs are currently priced below the July cap level. Check comparison sites like Ofgem's accredited list. But be aware that fixes typically last 12 months and may have exit fees if you want to switch again.
