July 2026 brings several significant financial changes for UK households, including an increase in energy bills, adjustments to the Motability scheme, and new regulations for Buy Now, Pay Later (BNPL) services. Understanding these updates is crucial for managing your personal finances effectively.
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This month introduces several key adjustments across various sectors that will directly affect household budgets.
Rising energy bills and the Ofgem Price Cap
From 1 July 2026, the Ofgem Price Cap is rising by approximately 13% for the period covering 1 July to 30 September 2026. This increase will push the average annual gas and electricity bill for a typical household paying by Direct Debit to £1,8621. This figure is based on average energy unit rates and standing charges across England, Scotland, and Wales. The price cap limits what suppliers can charge per unit of gas and electricity, as well as the daily standing charge.
Motability scheme adjustments
New contracts through the Motability scheme will include a reduced mileage allowance starting from 1 July 2026. The standard allowance will be 10,000 miles a year, a significant reduction from the previous 20,000 miles. For a typical three-year lease, this means a total of 30,000 miles. If you exceed this limit, excess mileage will be charged at 25p per mile. These changes apply to new vehicle orders placed on or after 1 July 2026; existing leases will not be affected until renewal. Additionally, the number of tyre replacements allowed has been reduced from eight to six over a three-year lease, and for a five-year Wheelchair Accessible Vehicle (WAV) lease, up to ten tyres can be replaced, with up to six for damage. You must also now pay an admin fee and inform the RAC when travelling to the EU.
Buy now, pay Later (BNPL) regulation
From 15 July 2026, BNPL products will come under the regulation of the Financial Conduct Authority (FCA). This new oversight aims to provide customers with stronger protections, including clear pre-contract information, proportionate affordability assessments, and support for those in financial difficulty. Consumers will also gain access to complaints and redress mechanisms, allowing them to escalate issues to the Financial Ombudsman Service (FOS) if unsatisfied with a lender's response.
Beyond direct household costs, July 2026 also brings other important economic and regulatory milestones.
Bank of England consultations and decisions
The Bank of England's public consultation on the design of the next series of banknotes is closing on Friday 3 July 2026. The public has been invited to choose UK wildlife to feature on the new £5, £10, £20, and £50 notes. The Bank's Monetary Policy Committee will also meet on 30 July 2026 to make its next decision on the base interest rate. The current base rate has been held at 3.75% since its last meeting in June.
Inflation data and interest rate outlook
The latest inflation data from the Office for National Statistics (ONS) will be released on 22 July 2026. The annual inflation rate in the UK was 2.8% in May 2026, remaining unchanged from the previous month. These figures are closely watched as they influence the Bank of England's decisions on interest rates.
Self Assessment payment deadlines
For Self-employed individuals, sole traders, and landlords, the second Self Assessment payment on account for the 2025–26 tax year is due by midnight on 31 July 2026. This advance payment helps spread the cost of tax owed, with two payments made each year. Missing this deadline can incur interest charges.
These financial shifts highlight the importance of proactive financial management.
Reviewing your household budget
With rising energy costs and other changes, now is a good time to review your household budget. Identify areas where you can adjust spending and ensure you account for increased outgoings. Understanding your income and expenditure will help you adapt to new financial realities.
Exploring energy management strategies
The increase in the Ofgem Price Cap means higher energy bills for many. Exploring ways to manage your energy consumption can help mitigate the impact. This could involve improving home insulation, being more mindful of appliance usage, or considering smart home devices to optimise heating and electricity.
Understanding consumer protections
The new BNPL regulations offer enhanced consumer protections. Familiarise yourself with these rights, especially regarding affordability checks and your ability to raise complaints. This knowledge can empower you when using such services.
Amidst these financial changes, particularly the rise in energy bills, Fuse Energy empowers you to take control of your home energy. Our transparent app provides clear insights into your energy consumption, allowing you to understand and manage your usage effectively. With smart meter data at your fingertips, you can make informed decisions to protect yourself from surprises and shocks. Plus, our 24/7 human customer support ensures you always have assistance when you need it, turning the challenge of rising costs into an opportunity for greater financial control. Click here to switch to Fuse Energy today. Find out more about our mission to make energy abundant by clicking here.
References
- The Mirror. 7 money changes coming in July 2026 that will affect your finances
