UK households are set to experience a series of significant financial updates starting next month, with major adjustments to energy bills, buy now pay later (BNPL) rules, and the Motability scheme. These changes will impact millions of families across the country.
The current year has already placed a heavy financial burden on households as prices continue to climb. April was particularly challenging due to simultaneous bill increases, including council tax surges alongside standard utilities like internet and water. Grocery bills at supermarkets are still rising steadily, mirroring the rising costs seen across most standard monthly outgoings. A recent report from Barclays highlighted this growing pressure, indicating that 65% of households have cut back on non-essential spending just to cover their basic bills.
Energy Bills to Rise by 13% from July 1
The most substantial financial blow landing on UK households next month is a steep rise in domestic energy bills. After a short-lived reprieve during the spring months, the regulatory safety net is being adjusted upwards once again. Ofgem has confirmed that the Energy Price Cap will increase to £1,862 per year for a typical dual-fuel household paying by Direct Debit, representing a £221 increase compared to the current level.
The rise is chiefly being fuelled by climbing global wholesale gas prices, linked to continuing tensions across the Middle East. If you are on a standard variable tariff — which covers roughly 65% of UK homes that have not secured a fixed deal — your unit rates will shift as follows: Electricity unit rate is increasing from 24.67p per kWh to 26.11p per kWh, with the daily standing charge remaining virtually flat at 57.19p. Gas unit rate is jumping more significantly from 5.74p per kWh to 7.33p per kWh, while the daily standing charge holds steady at 29.04p.
It is important to note that the £1,862 figure is merely an illustrative average. The cap restricts the price per unit, not your overall bill. If you consume more energy, you will pay more. How your payment method influences the change varies: For direct debit or monthly bills, your supplier will automatically adjust your rates on July 1. If your account is in good credit standing, your fixed monthly payment might not increase immediately, but your usage will cost more against that balance. Smart Pay-As-You-Go meters will update their unit rates automatically on the morning of July 1. Traditional prepayment meters will see new, higher rates kick in the very first time you top up your key or card on or after July 1. If you are currently locked into a fixed-rate contract, you are completely exempt from this hike until your current contract expires.
New Hard Rules for Buy Now, Pay Later (BNPL) from July 15
If you use short-term financing apps like Klarna, Clearpay, or PayPal, the entire system is being legally restructured under the Financial Conduct Authority (FCA). From July 15, BNPL products will be regulated, giving users new rights. This includes the right to escalate complaints to the Financial Ombudsman Service if a provider refuses to help with a dispute over an order or payment timeline. Until now, users had very little legal recourse if a BNPL app handled a dispute unfairly.
Motability Scheme Changes from July 1, 2026 (New Orders)
Significant changes to the Motability Scheme take effect for all new orders placed on or after July 1, 2026. These updates, driven by UK Government tax changes, include newly applied VAT and Insurance Premium Tax, reduced annual mileage allowances, higher excess fees, and stricter tyre limits. Existing agreements remain unaffected until you renew. From July, a 20% VAT charge will apply to certain top-up payments for higher-end vehicles, alongside a 12% Insurance Premium Tax on scheme insurance. The excess mileage charge has risen from previous rates to 25p per mile (including VAT). The standard annual mileage allowance has been reduced to 10,000 miles per year (down from 20,000). As a result, a standard three-year lease now covers 30,000 miles, while a five-year Wheelchair Accessible Vehicle (WAV) lease covers 50,000 miles. Tyres remain included, however, fair-use limits now apply. For a three-year lease, a maximum of six replacements are covered (with up to four for accidental damage). European breakdown cover is no longer provided automatically free of charge. Drivers must now notify the RAC and pay an admin fee for a VE103 vehicle certificate prior to travelling abroad.
