Millions of households will experience eye-popping increases in their energy bills from April 1 as the price cap is set to rise. This decision will affect some 22 million households
Millions of households will see their energy bills rise by almost £700 from April, Ofgem has confirmed – and now you can see how much you can expect to pay.
The energy price cap – the maximum amount according to Ofgem that companies can charge customers on variable tariffs – has increased, in part due to the pandemic.
As a result, people on default fares paying by direct debit will see a staggering 54% increase from £1,277 to £1,971 from April 1.
Prepaid customers will be the most affected, with an increase of £708 from £1,309 to £2,017.
This decision will affect some 22 million households and follows a 12% increase in October .
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Ofgem chief executive Jonathan Brearley said: “We know this increase will be extremely worrying for many people, especially those struggling to make ends meet, and Ofgem will ensure that energy companies support their customers in every possible way.
“The energy market has faced a huge challenge due to the unprecedented rise in global gas prices – a unique event in 30 years – and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the actual cost of supplying electricity and gas.
“Ofgem is working to stabilize the market and, in the longer term, to diversify our energy sources, which will help protect customers against similar price shocks in the future.”
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An announcement on the energy price cap was supposed to arrive next week but has been postponed to today.
The price cap sets a limit on the prices a supplier can charge for each unit of gas and electricity you use and is reviewed twice a year.
Gas prices around the world have spiked due to the pandemic.
Due to wholesale gas prices – which quadrupled in the last year – suppliers are now passing the cost on to customers.
Several readers have shared their stories of how the new prices will affect them.
Ofgem reviews its energy price cap twice a year. The next time that might change is in October, although that might change.
While wholesale prices have fallen, experts say October could see the price cap rise again, perhaps up to an average of £2,300 a year.
To ‘mitigate’ the announcement, Rishi Sunak announced a one-time refundable £200 discount and discount on council tax bills.