Ofgem has today confirmed a rise in the energy price cap for millions of households across Great Britain, with average annual bills set to increase from July.
The new cap, which limits the amount suppliers can charge households on standard variable tariffs, is expected to push the typical annual dual-fuel bill up to £1862 a year – an increase of 13%, or roughly £221 compared to the current level.
According to Ofgem, a typical UK household with two to three people uses around 2,700 kWh of electricity and 11,500 kWh of gas each year. The predicted annual costs are based on this level of energy usage, although the amount you pay will vary depending on how much energy your household actually uses.
The increase had been widely predicted ahead of today’s announcement, with analysts at Cornwall Insight warning earlier this month that rising wholesale gas prices were likely to feed through into higher household bills.
Energy experts say the latest rise has been driven largely by global instability affecting gas markets, particularly tensions in the Middle East and disruption to energy supplies moving through the Strait of Hormuz. Although wholesale prices have eased slightly in recent weeks, they remain significantly higher than earlier in the year.
The new price cap will come into force from 1st July and remain in place until the end of September.
What the price cap rise means for households
While the increase arrives during the summer months – when household energy use is typically lower – campaigners have warned it will still put pressure on families already struggling with the cost of living. Concerns are also growing about what could happen later in the year if prices remain elevated heading into winter.
Cornwall Insight said the rise highlights how exposed the UK remains to global energy markets, despite efforts to reduce reliance on imported fossil fuels.
The consultancy’s latest forecast suggests electricity costs for a typical household will account for around £916 a year, while gas costs are expected to total roughly £934 annually under the new cap.
The government has said it remains committed to bringing down energy costs in the long term through investment in renewable energy and home efficiency improvements. However, ministers are also facing growing calls to provide extra support for vulnerable households ahead of winter.
Consumer groups are encouraging households to review their tariffs, with some fixed-rate deals currently available below the new price cap level.
Today’s announcement marks another reminder that, despite energy prices falling from the record highs seen during the 2022 energy crisis, many households are still facing bills well above historic averages.
