Households face £139 hike in energy bills
Energy bills for 15 million households increased by at least £139 to a record high from yesterday under the terms of the industry regulator’s Ofgem's latest price cap.
Regulator Ofgem decided in August that customers on default tariffs paying by direct debit will see the sharpest jump in prices since the cap was introduced in January 2019, taking average bills to £1,277.
Pre-payment customers will see costs rise by £153, from £1,156 to £1,309.
The increase has been driven by gas prices hitting a record high as inflation jumped amid the easing of pandemic restrictions, Ofgem said.
The latest cap was determined before the recent unprecedented increases in global prices, which has seen nine small UK suppliers collapse.
Citizens Advice said that consumers who are moved to a new energy firm after their supplier goes out of business stand to pay almost £30 a month more – just as the new price cap comes into effect.
The energy watchdog warns people will face "desperate choices" this winter after finding that customers of the five largest failed suppliers are set to pay £6.70 more a week when moved on to the default tariffs of a replacement firm.
Although consumers who shop around and sign up to fixed plans with suppliers are not subject to the price cap, the recent wholesale hikes have seen firms hiking the cost of their fixed plans significantly.
The regulator reviews the price cap once every six months, and changes it based on the cost that suppliers have to pay for their energy, cost of policies and operating costs.