Ofgem energy price cap July 2026: £1,862 a year — explained

What is the Ofgem energy price cap?

The energy price cap is the maximum that suppliers in England, Scotland and Wales can charge per unit of gas and electricity, plus the daily standing charge, on a standard variable tariff (SVT). Ofgem, the energy regulator, sets it every three months. The widely-quoted £1,862 figure is not a maximum bill — it is what a household with typical usage would pay over a year. If you use more energy, you pay more; if you use less, you pay less. There is no cap on your total bill, only on the rates.

For the cap period 1 July to 30 September 2026, a typical dual-fuel direct-debit home pays £1,862 a year, up from the £1,641 cap that ran from 1 April to 30 June 2026. Ofgem confirmed the new level on 27 May 2026.

How the cap works — and who it affects

The cap only applies to default standard variable tariffs. About 40% of households are on fixed deals and are not affected by this rise — their unit rates are locked until their contract ends. If you are on a fixed tariff, the July increase does not change your rates. The cap also does not cover Northern Ireland, which has a separate regime.

Because the cap is reviewed quarterly, the rate you pay on an SVT can move up or down every three months. That uncertainty is the main reason many households choose to fix.

How the £1,862 figure is built

The headline number assumes a household using about 2,700 kWh of electricity and 11,500 kWh of gas a year — Ofgem's definition of typical usage. Your bill is then the unit rate multiplied by the energy you use, plus the daily standing charge that applies whether you use any energy or not. From 1 July 2026 a typical dual-fuel home pays roughly £705 of that bill in electricity and the rest in gas, before the standing charges are added. Because the standing charge is fixed per day, lower-usage homes feel it proportionally more.

How to check if the rise affects you

Look at your latest bill or online account for the tariff name. If it says "standard variable", "flexible" or "default", you are on the capped rate and your unit prices rose on 1 July 2026. If it names a fixed end date — for example "Fixed until March 2027" — you are protected at your locked rates until then, and the July rise does not apply to you. Either way, comparing the market tells you whether a cheaper fixed deal is available right now.

Compare tariffs that beat the new cap

The cap is a ceiling, not the cheapest deal. Tell us a few details and we will find the fixed tariffs that come in below the £1,862 cap for your home.

Energy price cap per kWh and by payment method — from 1 July 2026

The headline £1,862 figure is for direct debit. What you actually pay depends on how you pay and how much you use. The GB-average cap rates and typical annual bills from 1 July 2026 are below.

Typical annual bill by payment method

Unit rates and standing charges

GB averages for direct-debit customers, including VAT, per Ofgem (cap confirmed 27 May 2026). Your regional unit rate varies by postcode.

Is the rise avoidable? For most people, yes

Here is the part the headlines miss: the price cap rise is effectively voluntary for most households. The cap only governs the standard variable tariff — the default you are moved onto if you do nothing. If a fixed deal is priced at or below £1,862 a year, fixing it locks in that rate and you simply do not pay the higher capped rates.

Throughout 2026 there have been fixed tariffs priced below the cap, so for many homes the cheapest move is to switch off the SVT and fix. A fix also removes the quarterly uncertainty — your unit rate will not change at the October or January reviews. The trade-offs to check are the exit fees and the contract length, which you should weigh against the size of the saving.

The practical rule: if you can fix at or below your current capped rate, doing so beats sitting on the cap. Run a comparison, see what is available for your postcode, and only switch if it saves you money.

Switching supplier is free, there is no break in your supply, and you keep the same gas and electricity coming into your home — only the company that bills you changes. If you decide not to fix, it costs nothing to stay on the cap, but you carry the risk of the next quarterly review. Comparing takes a couple of minutes and is the only way to know whether a fix beats £1,862 for your home.

What happens next: the 1 October 2026 review

Ofgem sets the next cap for 1 October to 31 December 2026, with the level expected to be announced in late August. Analyst Cornwall Insight currently forecasts the October cap at around £1,899 a year for a typical dual-fuel direct-debit home (on a current typical-usage basis) — a forecast, not a confirmed figure, and one that moves with wholesale prices between now and the announcement. Fixing today protects you from further quarterly changes if they materialise.

Energy price cap July 2026 FAQs

Related guides

• Compare energy prices — whole-of-market gas & electricity
• Should I switch to a fixed tariff now the cap has risen?
• Regional price cap unit rates by postcode
• Energy tariff calculator — estimate your annual cost

Written by: EnergyPlus Editorial Team · Last reviewed July 2026.