July 2026 Price Cap

The new price cap has been announced for the next quarter, which comes into effect on 1 July 2026 until 30 September 2026. Due to the conflict surrounding Iran, which started just after the last price cap announcement in February, global energy wholesale costs have increased – this is being reflected in the 13% price cap increase.

This price cap increase will see the average annual energy bill sit at £1862/year from the current £1641/year. However, this number uses the Typical Domestic Consumption Values, which has recently been reviewed to find that households are actually using less energy compared to the last TDCV review (7% less electricity, and 17% less gas) so, from 1 July, the reduction in usage will be shown by reducing the TDCV to £1663. This will make it look like the price cap hasn’t increased that much but, as always, actual energy bills will vary depending on usage, and this number is just to give you a general idea of how much a ‘typical’ household could pay on their energy bills per year.

The temporary good news is that most of the overall 13% increase will be seen on gas, due to the high amount of electricity that is generated through renewable technology and therefore less affected by the gas and oil supplies. Due to the time of year, it is unlikely that you will see a huge increase in your monthly energy bill, as we tend to use the heating less, however it is unlikely that the price cap will go down before Winter so, if you can afford to, it is recommended to put some money aside over Summer to help you with your Winter energy bills.

The price cap varies by payment type and region. Below lays out the price cap changes for The Midlands depending on payment type.

Direct debit

People on direct debit will see their electric standing charge capped at 59.71p and their gas standing charge capped at 29.06p. This means that a household that has both gas and electric, will pay 88.77p per day from 1 July, which is actually a decrease of 0.06p from the current price cap.

The unit rates, however, will increase by 1.44p (to 25.33p) per unit for electricity, and by 1.58p (to 7.27p) per unit for gas. This means that, although you will likely be using less energy over the Summer, every unit that you do use will be more expensive.

Pre-payment meter

People on pre-payment meter will also have their electric standing charge capped at 59.71p and their gas standing charge capped at 29.06p. This means that a household that has both gas and electric, will pay 88.77p per day from 1 July, which is actually a decrease of 0.06p from the current price cap.

People on pre-payment meter, which still currently has the lowest unit rates, will see the cap for their electric unit rate rise to 24.57p (a 1.4p increase) and their gas unit rate rise to 7.01p (up by 1.55p).

On receipt of bill

On receipt of bill, also known as standard credit, remains the most expensive method of payment. The standing charge has risen to 68.37p for electricity, but will be decreasing slightly to 36.7p per day for gas. Although the gas standing charge has decreased, this means that dual-fuel households will remain over the pound-a-day line and will be paying 105.07p which is only 0.01p per day less than the current rate. Over the next 3-month period (before the price cap changes again on 1 October), this will see on receipt of bill households paying a total of almost £15 more on their standing charge than direct debit or pre-payment customers.

The unit rate is also highest for customers paying on receipt of bill. The capped unit rate for electricity will increase to 26.74p (up by 1.52p), whilst the gas unit rate will increase to 7.66p (up by 1.67p). Although the amount the unit rates have increased by are similar to the other payment methods, the electric unit rate is still 1.41p more than for direct debit customers and 2.17p more than customers on a pre-payment meter.

Overall, you may not see a huge rise in your energy bills over the next few months, even though the unit rate has increased, but the huge increase in gas prices will have a big impact on people who use gas for heating, cooking, and water heating. And, as we move back into shorter days, the electricity increase will start to be more noticeable. If you can afford to pay extra on your direct debit, or set some money aside, then now is the time.

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