Ofgem will announce the new energy price cap on 27 February, with a rise of roughly £63 taking effect from July. That puts the typical annual dual-fuel bill at £1,762, a 3.7% increase on the current £1,699 cap. The jump is driven by higher wholesale gas and electricity costs, themselves a consequence of the Iran conflict and ongoing disruption to global supply routes, as reported by the Evening Standard. For the 28 million households on standard variable tariffs, this is not a surprise, but it is a fresh sting after two years of historically high prices.
Why the cap is rising, and what it means for your bill
The price cap is set quarterly by Ofgem based on wholesale energy costs over the preceding six months. The current rise reflects a period when UK wholesale gas prices climbed by 12% between October and January. The Iran war has disrupted LNG shipments through the Strait of Hormuz, while Russian pipeline gas to Europe remains at a trickle. The result: every kilowatt-hour of gas you burn this summer will cost roughly 5% more than it did in the spring. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity a year, that’s an extra £5.25 a month. It does not sound catastrophic. But layered on top of a 54% rise in 2022 and a further 20% in 2023, the cumulative effect is brutal.
Who gets hit hardest, and who can escape
The cap applies to default tariffs, the standard variable contracts that most households fall onto when a fixed deal ends. Those on fixed tariffs or prepayment meters are not directly affected, though prepayment customers already pay a premium. The catch is that the cap does not protect the most vulnerable. Low-income households, who spend a larger share of their income on energy, feel every pound. The Energy Saving Trust estimates that improving a home from EPC band D to C saves roughly £300 a year on bills. That is nearly five times the coming rise. Loft insulation, cavity wall fill, and draught-proofing remain the cheapest, fastest ways to cut usage. A typical loft top-up costs £300–£400 and pays back in under two years.
What to do before July, practical steps for homeowners
The cap rise is not avoidable by switching tariff, fixed deals are currently priced above the cap. But you can reduce consumption. Start with a home energy audit: check loft insulation depth (270 mm is the minimum under Building Regulations), seal gaps around windows and doors, and install a smart thermostat. The Boiler Upgrade Scheme offers £7,500 toward a heat pump, though installation costs typically run £10,000–£15,000. For most, the quickest win is behavioural: turning down the flow temperature on a combi boiler from 70°C to 55°C can save 8% on gas, according to the Energy Systems Catapult. Ofgem has also confirmed the standing charge, the daily fixed cost, will rise by 2p to 62p a day, adding another £7.30 a year. That charge is harder to dodge, but every kWh saved is a kWh not paid for at the new, higher rate.
Households on standard variable tariffs should check eligibility for the Warm Home Discount, which provides £150 off electricity bills for low-income customers. Applications for winter 2025–26 open in July. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. Apply through your energy supplier. The cap rise is coming. The only way to fight it is to use less energy, and the tools to do that are available now.
Frequently Asked Questions
No. The cap only applies to standard variable tariffs. If you are on a fixed deal, your unit rates and standing charges remain unchanged until the fix ends. However, most fixed tariffs currently cost more than the cap, so switching is not advisable.
The Energy Saving Trust estimates that simple measures like loft insulation, cavity wall fill, and draught-proofing can save a typical 3-bed semi around £300 a year, nearly five times the £63 cap rise. Costs vary, but loft top-ups typically pay back within two years.
