Martin Lewis: For most people, July's 13% Energy Price Cap rise is voluntary – it can (and should) be avoided

How the Price Cap works and what's changing from 1 July

The Energy Price Cap sets a limit on the maximum amount suppliers can charge households on standard or default variable tariffs (essentially everyone not currently on a fix) for each unit of gas and electricity they use. It also sets the maximum daily Standing Charges (what you pay to have your home connected to the gas and electricity grids). But there's no actual cap on what you pay, so if you use more, you pay more.

The Price Cap changes every three months. The current Price Cap, in place until 30 June 2026, is £1,641 a year for a 'typical' dual-fuel (gas and electricity) household paying by Direct Debit.

From 1 July 2026:

• If you pay by monthly Direct Debit, the new Price Cap will be £1,862 a year on average for a typical dual-fuel household. This is a rise of about £221 a year or 13.5% (slightly more than had been widely expected).

• If you prepay for your energy, prices will rise by 13.5% to £1,812 a year.

• If you pay on receipt of a bill, it'll be a 13.1% rise to £2,005 a year.

Martin Lewis: 'For most people, July's 13% Energy Price Cap rise is voluntary – it can (and should) be avoided'

Commenting on the Energy Price Cap announcement on Wednesday 27 May, Martin wrote:

Rates vary by region so you can use our updated 'What you'll pay from 1 July' calculator to see how the new Price Cap will affect you.

This hike is coming over the summer period, when we use less energy

While any increase in energy bills is bad news, it's worth noting that this is coming during the summer months, when we generally use a lot less energy. On average, most homes only use around 15% of our annual energy consumption between July and September.

In practical terms, for someone paying £150 a month energy, it's going to add around £30 to £40 to your costs over that three month period – not good, but not catastrophic. The main issue is if these high prices continue into the winter months – and it's currently predicted they will. If you're on the Cap, and you're risk averse, it might be worth considering fixing (we've full help below).

How to check if you're on a Price-Capped tariff

If you're not on a fix or special deal, you are likely to be on the Price Cap. These are firms' standard default consumer tariffs, often called 'Standard Variable' or 'Flexible' tariffs. You can check if you're on the Energy Price Cap using our new tool.

Should you fix your energy tariff now?

Energy wholesale prices are still high due to conflict in the Middle East, so there are very few deals available that are cheaper than the current Price Cap. Whether you should fix now depends on how risk averse you are and your current situation:

• If you're on the Price Cap, the risk averse thing to do right now is to fix your energy, as this will lock in your rates for a year. But don't just grab any fix, ideally you'd want to fix that's priced at around or just less than the current Cap. If you get a fix just under the current Cap, you'll save a smidgeon now, but more importantly, you'll protect yourself against the upcoming 13.5% increase in the Price Cap from 1 July.

• If you're already on a fix but it's ending soon. If you've less than 50 days left on your current deal, you can't be charged exit fees, so you're free to ditch it and switch. But with very few tariffs below the Cap, you may be better waiting and regularly doing a comparison to see if cheaper fixes become available over the next few weeks. If you switch now, you'll likely pay a bit more, so it could be worth holding out right now to see if cheaper deals become available.
  
  Though do make sure to grab a new tariff before your deal finishes, as otherwise you'll be rolled onto your supplier's standard variable tariff when it ends.

• If you're on a cheap fix with more than than 50 days remaining, now might not be the best time to think about switching, as ditching your current deal and getting another fix will likely mean you'll pay more and will almost certainly have to pay early exit fees.

Your cheapest fix depends on where you live and how much energy you use, so do a comparison. Remember though, the price that savings comparison sites (including our Cheap Energy Club) will show now are compared to the current Cap, not the one it will rise to in July.

Options other than fixing

Those with low usage should consider looking at EDF or British Gas special tracker deals, which discount £50 off the annual Standing Charge (with low usage, that's a bigger proportionate saving). Meanwhile, sophisticated users could look at (or likely already know about) time of use tariffs.

Ofgem is reducing its annual 'typical use' figures from July, so you may see the headline price quoted differently

Regulator Ofgem is changing its calculations on how much energy a 'typical' household in Great Britain uses. This means you may see a lower headline annual cost for the new Price Cap from 1 July (and other energy tariffs) if based on the new lower typical use figures. But don't be fooled – prices are still rising significantly.

Ofgem says it regularly reviews these figures to ensure they reflect changing patterns of gas and electricity use across Great Britain. It has found that household energy consumption has reduced considerably in recent years.

Under the existing values, the typical household bill from July is £1,862 a year. Under the new levels, that'll be £1,663 a year. But as we always say, these figures are largely meaningless – there's no such thing as a typical home, it's what you use that counts. So keep the 13% rise in mind.

You can read the full details of what's changing in our blog.