Ofgem will announce a 13% increase to the energy price cap in July, the second rise this year and the direct result of escalating conflict in Iran, as reported by Proactive Investors. The cap will hit £2,124 a year for a typical dual-fuel household paying by direct debit, up from £1,879 today. That is £245 more than the current level, and £600 above the pre-crisis average of £1,277 in 2021.
Who pays the most
Households in poorly insulated homes, EPC band D or below, will feel the sharpest sting. A typical 3-bed semi with cavity walls and loft insulation at the minimum standard uses roughly 12,000 kWh of gas and 2,900 kWh of electricity per year. At the new cap, that means around £1,200 on gas alone. The rise is driven by wholesale gas costs, which Ofgem says now account for 52% of the typical bill, up from 45% last year. Homes with solid walls or no loft insulation will see even larger proportional jumps because they burn more gas to stay warm.
What this misses
Yet the cap rise is only half the story. The government’s own figures show that a home moving from EPC band D to band C saves about £290 a year on energy bills, more than the entire cap increase. The catch is that most grants target low-income households or specific measures. The Great British Insulation Scheme covers loft and cavity wall insulation for eligible homes, but it does not pay for solid wall insulation, which costs £8,000–£15,000. The Boiler Upgrade Scheme offers £7,500 towards a heat pump, but installation costs typically start at £12,000. Homeowners should check eligibility on gov.uk before July, when demand for contractors will spike.
What to do by July
The cheapest fix is a smart thermostat and radiator valves, costing £150–£300 and cutting gas use by 10–15%. For those with £5,000 to spend, solar panels on a south-facing roof can cut electricity bills by 50–70%, though payback depends on export tariffs. The most impactful single upgrade remains loft insulation: topping up from 100 mm to 270 mm costs about £400 and saves £200 a year. Homeowners on standard variable tariffs can fix a deal now, some fixed tariffs are still 5% below the July cap. Compare rates on Ofgem’s accredited comparison sites. Do it before 1 June, when suppliers begin pricing in the rise.
Frequently Asked Questions
No, fixed tariffs are locked in for the contract term. However, most fixed deals currently available are set to expire before July, so you may need to switch to a new fix before the cap takes effect to avoid the increase.
You must own your home (or have landlord permission), have a valid EPC with no outstanding recommendations for insulation, and install an MCS-certified heat pump. Applications are processed through certified installers. Check gov.uk for the latest list.
