Energy bills to jump by £221 a year from July: How to cut your costs

Now is the time to start looking at ways to reduce your bills.

Upset woman sitting in a bright white lounge looking at a bill.

Getty Images/ Natalia Gdovskaia

Published: July 1, 2026 at 10:16 AM

Heating bills are probably the last thing on most people’s minds after the soaring temperatures many parts of the country have experienced recently. However, with energy costs set to rise sharply from July 1, now is the time to start preparing.

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The new energy price cap will jump to £1,862 from this date, adding £221 a year or £18 a month to gas and electricity bills for the average household. Ofgem claims the hike is due to higher wholesale gas prices, caused by the conflict in the Middle East.

It’s worth noting that the price cap isn’t a limit on the amount bills will cost you, it’s simply the maximum rates suppliers can charge for each unit of gas and electricity. That means if you live in a larger property and consume a lot of energy, your bills may well be more than £1,862 a year, or, if you live in a smaller property and don’t use much energy, your bills could be lower than the cap.

Ned Hammond, Energy UK’s deputy director, customer policy, said: “A rise of this scale will already be a concern for millions of customers but such worries will be magnified if bills remain at this level – or higher – over the winter months.”

Ways to reduce your energy bills

One of the most effective ways to reduce your energy bills is to check whether you're on the most competitive tariff available. You can check this using an Ofgem-accredited comparison site such as Uswitch, MoneySuperMarket or Simply Switch.

There are only a few fixed tariffs available at the moment that are cheaper than the current price cap. However, savings are likely to be greater once the new cap comes into effect. Deals include a 14-month fix from British Gas and Fuse Energy’s 13-month fix both of which cost around 4.3% less than the current price cap, although the amount you’ll pay depends on your energy usage and where you live.

Sarah Pennells, consumer finance specialist at Royal London, said: “If you can’t save money by switching, then using energy as efficiently as possible and considering switching to direct debit if you pay your bill when it arrives, could save you money.”

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According to Ofgem, moving from standard credit to direct debit could save customers around £143 on their annual bills. A spokesman for Ofgem said: “Additional savings are also available through offers such as half price or lower cost electricity at weekends, which are typically accessible to households with smart meters and other low carbon technologies.”

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Having showers rather than baths can also keep costs down, especially if you keep them short. A spokesman for the Energy Saving Trust said: “Keeping your shower time to just four minutes could save you £45 a year on your energy bills. You can also save £27 a year on your electricity bill by making small changes in how you use your washing machine. These include washing your clothes on a 30°C cycle instead of higher temperatures, and reducing your washing machine use by one run per week for a year.“

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