UK household energy bills will rise from July 1 under a new price cap, increasing typical annual costs by more than £220 to £1,862 (or £1,663 under a revised calculation method). The increase follows months of volatility in global gas markets. The End Fuel Poverty Coalition estimates that 13.5 million households will now spend more than 10% of their income on energy, up from approximately 11.3 million in April, while nearly 5.5 million homes could spend around 20% of their income on energy costs. Consumer groups warn that the higher tariffs will place unsustainable financial pressure on millions of families ahead of the colder months.
End Fuel Poverty Coalition Estimates 13.5 Million Households Affected
The End Fuel Poverty Coalition estimates that around 13.5 million households will now spend more than 10% of their income on energy bills, up from approximately 11.3 million households recorded in April. Spending more than a tenth of household income on energy is used as a measure of fuel poverty. The coalition also warned that close to 5.5 million homes could end up spending around 20% of their income on energy costs, a significant increase from the 4.3 million households estimated earlier this year. The figures are based on research conducted by the University of York.
According to the coalition, households are now losing an important opportunity to reduce existing energy debt or build financial reserves before winter arrives. With prices increasing during the summer months, many families may enter the colder season already struggling to manage their finances.
Electricity and Gas Unit Rates Increase Under New Cap
The latest price cap brings higher unit rates for both electricity and gas. For households paying by direct debit, electricity prices will increase from 24.67 pence per kilowatt-hour to 26.11 pence, while gas prices will climb from 5.74 pence to 7.33 pence per kilowatt-hour. Although these changes may appear relatively small on a unit basis, they translate into much higher annual costs for millions of consumers.
Energy Market Analysts Forecast Elevated Prices Through Winter
Energy market analysts warned that prices are unlikely to ease in the near future. Forecasts suggest energy costs could stay elevated as autumn and winter approach, with higher gas consumption during colder weather expected to place more financial strain on households. As a result, many families may face difficult decisions about managing essential living costs while coping with higher energy bills throughout the remainder of the year.
FAQ
What is the new UK household energy price cap from July 1?
Under the new price cap, a typical annual household energy bill will increase by more than £220, taking the equivalent annual cost to £1,862 under the regulator's previous calculation method. Using a newer methodology that assumes lower energy consumption, the average annual bill is estimated at £1,663.
How many UK households will spend more than 10% of their income on energy after July 1?
The End Fuel Poverty Coalition estimates that around 13.5 million households will spend more than 10% of their income on energy bills, up from approximately 11.3 million households in April. Close to 5.5 million homes could spend around 20% of their income on energy costs, up from 4.3 million households earlier this year.
What are the new electricity and gas unit rates under the July 1 price cap?
For households paying by direct debit, electricity prices will increase from 24.67 pence per kilowatt-hour to 26.11 pence, while gas prices will climb from 5.74 pence to 7.33 pence per kilowatt-hour.
