The energy bills of millions of households in Great Britain are to rise by 6.4% from April 1 when Ofgem increases its price cap for a third consecutive quarter.
The regulator said the increase, which will raise the average bill for households in England, Scotland and Wales on a standard variable tariff from the current £1,738 a year to £1,849, followed a recent spike in wholesale prices.
The rise will equate to £111 for an average household per year, or around £9.25 a month, over the three-month period of the price cap.
This is 9.4% or £159 higher than this time last year but £531 or 22% lower than at the height of the energy crisis at the start of 2023.
Ofgem Chief Executive Jonathan Brearley said: “We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households.
“But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, homegrown system.
“Energy debts that began during the energy crisis have reached record levels and without intervention will continue to grow. This puts families under huge stress and increases costs for all customers. We’re developing plans that could give households with unmanageable debt the clean slate they need to move forward.”
Energy Secretary Ed Miliband said: “This is worrying news for many families. This government is determined to do everything we can to protect people from the grip of fossil fuel markets.
“Expanding the Warm Home Discount can help protect millions of families from rising energy bills, offering support to consumers across the country.
“Alongside this, the way to deliver energy security and bring down bills for good is to deliver our mission to make Britain a clean energy superpower with homegrown clean power that we in Britain control.”
Ofgem said four million customers have moved to a fixed tariff since its last price cap announcement in November, taking the total to 11 million, meaning they will not be affected by the increase.
This was the largest movement of customers coming off the price cap and on to a fixed deal since the energy crisis, the regulator said.
However, Citizens Advice Chief Executive Clare Moriarty said the service was helping people every day who “simply can’t afford this latest price hike” as its latest research showed the number of people living in debt to their energy supplier had reached a new high of nearly seven million.
Moriarty said: “We’re particularly concerned about households with children, where over one in three struggle to afford bills, rising to more than half of those on low incomes.
“The government can’t let another winter go by without targeted support for those most in need, and there is a way of paying for this. Our recent analysis found energy network companies made billions in excess profits while households have faced soaring bills and it’s only right this money be used to help fund better targeted bill support and much-needed debt relief.”
The price cap increase follows a warning to households of at least months of pain after the Bank of England forecast higher-than-expected inflation this summer due to rising bills.
The Bank’s warning that inflation will hit a peak of 3.7% later in the summer follows a multitude of predicted hikes to household expenses, including food, energy, water, council tax and bus fares.
By Josie Clarke, PA Consumer Affairs Correspondent
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