The price cap rises by £63 from 1 July, but the real story is the £18.12 hairdryer tax. That’s what a typical household will pay extra each year to run a 2,000W hairdryer for ten minutes a day under the new unit rate of 24.5p per kWh, up from 23.0p. The Sunday Guardian reported the figure as part of its analysis of the latest Ofgem adjustment, which increases the cap to £1,928 for a typical dual-fuel direct debit household. The full article can be read here.
Who pays the £18.12, and who doesn’t
The Guardian’s calculation assumes a 2,000W hairdryer running for 10 minutes a day, 365 days a year. That’s 121.7 kWh annually. At the old rate of 23.0p, it cost £28.00. At the new rate of 24.5p, it’s £29.82, an extra £1.82 a month. But the cap is a ceiling, not a floor: 11 million households on standard variable tariffs will see this rise, while those on fixed deals locked in below 22p per kWh will not. Ofgem data shows 40% of households are still on variable tariffs. The catch is that standing charges, the daily fee for being connected to the grid, are rising too, by 2p a day in most regions. That adds another £7.30 a year regardless of whether you use a hairdryer at all.
What this means for your EPC and retrofit plans
The hairdryer tax is a symptom of a deeper problem: Britain’s electricity is expensive because network and policy costs are loaded onto the unit rate. The Energy Saving Trust estimates that 40% of a typical bill goes to network, social, and environmental levies. For a 3-bed semi with an EPC rating of D, the annual electricity cost is around £800. A 4% rise from the cap adds £32. The only permanent fix is to reduce kWh consumption, by insulating loft and walls, switching to LED bulbs, and replacing old appliances with A+++ rated ones. Each EPC band improvement typically cuts energy use by 15-20%, saving £100-160 a year on a combined gas and electric bill. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing.
Standing charges: the hidden tax you can’t avoid
Ofgem’s cap limits the unit rate but leaves standing charges largely unchecked. The average standing charge for electricity is now 53p per day, up from 45p in 2022. For a household using 3,000 kWh a year, standing charges represent 31% of the total bill. Low-energy users, pensioners in small flats, for example, pay a disproportionate share. The hairdryer calculation obscures this: the £18.12 rise is small, but the standing charge hike hits every household equally. Consumer group Which? has called for standing charges to be socialised into unit rates, so heavy users pay more. Ofgem has consulted on reform but no decision is expected before 2025.
What you can do now
Switch to a fixed tariff if your current deal expires within three months, some fixes are still below 23p per kWh. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. Replace your hairdryer with an energy-efficient model, a 1,500W unit uses 25% less electricity for the same drying time. And consider a smart plug with a timer: cutting your hairdryer use from 10 to 7 minutes a day saves £8.90 a year. Small habits add up. The cap rises on 1 July. You have until 30 June to lock in a better rate.
Frequently Asked Questions
The Sunday Guardian used Ofgem's new unit rate of 24.5p per kWh and a 2,000W hairdryer running for 10 minutes daily (121.7 kWh/year). At the old rate of 23.0p, the cost was £28.00; at the new rate it's £29.82, a rise of £18.12 over 12 months.
Yes. Ofgem's cap also limits standing charges, but they are set regionally and have risen by 2p per day on average since April. The daily charge for electricity is now around 53p, adding £193 a year regardless of usage.
