Millions of households will see their energy bills spike from next week. The Ofgem price cap is set to rise by around 13% on average from July 1, driven by higher wholesale costs linked to the conflict in the Middle East. While the increase comes over summer when energy use is lower, experts warn of another hike this winter.
What is the price cap?
Despite its name, the price cap does not limit your total bill; it sets a limit on unit rates and standing charges. Use more energy, and you pay more. The headline figure represents what Ofgem believes the average household will pay. Based on current usage estimates, the cap will rise from £1,641 to £1,862 a year for typical direct debit customers. Under new lower usage estimates, the current April cap would be £1,477 and the July cap £1,663. Energy analysts at Cornwall Insight predict the cap could rise to £1,899 (£1,709 under new estimates) this October. You are covered if on a variable tariff.
Take a meter reading
Before the price cap changes, take a meter reading to avoid being charged higher rates for energy used before July 1. Smart meter users should not need to send readings as they transmit automatically.
Consider fixing your tariff
Uswitch reports there are still 27 fixed deals cheaper than July's price cap, with average savings of up to £285. Ben Gallizzi, energy expert at Uswitch.com, said: "There are currently 27 fixed deals available that are cheaper than July’s price cap, with average savings of up to £285, so act now to save yourself money. It’s important to run a quick comparison to see options tailored to your personal energy usage. The price cap is going up, but your bills don’t have to." Tracker tariffs, which follow wholesale prices, are another option.
Prepare your home for winter
If energy prices remain high, start winter-proofing now. Seal draughts around doors, windows, and floors. Install radiator reflector panels and switch to LED bulbs. Get your boiler serviced in summer or early autumn to avoid the winter rush and emergency call-out fees.
Check winter payment eligibility
Winter Fuel Payments of up to £300 are available to state pensioners, though those earning over £35,000 must repay through tax. The Warm Home Discount offers £150 off electricity bills for eligible households. Contact your supplier if you're worried about falling behind; they can offer payment plans, breaks, or debt repayments. Vulnerable customers can join the Priority Services Register for advance notice of power cuts and emergency support.
