The energy price cap will rise by 13% from July 2026 – the largest single increase since the crisis peak of 2022. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity, that means an extra £180 a year on the combined bill.
Ofgem confirmed the new cap level to MSN on Tuesday, as reported by MSN. The regulator blamed rising wholesale gas prices, higher network costs, and increased supplier overheads. The news comes just weeks after the government confirmed it would not extend the Energy Price Guarantee beyond its current end date.
Who qualifies – and who doesn’t
The cap applies to households on standard variable tariffs (SVT) – roughly 28 million homes in England, Scotland and Wales. Those on fixed-term deals are protected until their contract ends. But with fixed rates now typically 5–10% below the SVT cap, switching could save a typical household £50–£100 a year, according to data from Compare the Market and MoneySavingExpert.
The catch is that many suppliers have withdrawn competitive fixes in recent months, citing market volatility. Ofgem’s own figures show only 12% of households are currently on a fixed deal, down from 40% in 2021. For those who can lock in a rate, the savings are real – but the window may be short.
What it costs a typical 3-bed semi
Let’s do the maths. The current cap for a typical dual-fuel household paying by direct debit is £1,928 a year. A 13% rise takes that to roughly £2,108. But that’s the average – households with higher consumption, such as those with electric heating or older, draughty homes, will see proportionally larger increases.
For a 3-bed semi with a gas boiler and standard double glazing, the annual gas usage is about 12,000 kWh and electricity 2,900 kWh. At the new cap, the electricity unit rate will rise to around 30.5p/kWh (from 27.0p) and the standing charge to 53p/day. Gas will go to 7.2p/kWh (from 6.4p) with a 31p/day standing charge. The standing charge alone – the fixed daily cost you pay regardless of usage – will add £310 a year for a typical household, up from £290.
What homeowners can do now
This rise is not inevitable. The single biggest lever homeowners have is insulation. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. The ECO4 scheme, running until March 2027, provides free insulation and heating upgrades for low-income households and those in fuel poverty.
For those with the capital, a heat pump can halve heating costs compared to a gas boiler, though the upfront cost – typically £7,000–£13,000 after the Boiler Upgrade Scheme grant of £7,500 – is a barrier. Solar panels, at £5,000–£8,000 for a 4kW system, can cut electricity bills by £300–£500 a year and earn export payments via the Smart Export Guarantee at about 15p/kWh.
Ofgem’s own data shows that the average household could save £150 a year by switching to a fixed tariff, and another £200 by installing basic insulation. That’s £350 off the £180 rise – a net saving of £170. The clock is ticking: the new cap takes effect on 1 July 2026. Households should check their current tariff, compare rates, and apply for insulation grants before the summer rush.
Frequently Asked Questions
No, the cap only applies to households on standard variable tariffs. If you have a fixed-term deal, your rate is locked until your contract ends. However, when that contract expires, you'll move to the SVT and the new cap will apply.
Yes. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. The ECO4 scheme offers free upgrades for eligible low-income households. You can check eligibility on gov.uk or through the Energy Saving Trust.
