Households energy bills to soar by £149 as Ofgem increases price cap by 10 per cent from October

23 August 2024, 07:24 | Updated: 23 August 2024, 10:44

Households are set to face soaring energy bills this winter after Britain's energy regulator announced the energy price cap will increase by 10%.

The energy price cap is now set to rise to an annual £1,717 on average from October, the regulator has said.

The cap affects the price paid for each unit of energy - gas and electricity - used in homes across Britain, setting the maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) used.

Typical households now face £149 increase on the average bill following the announcement.

It puts increasing pressure on the government, after it announced plans to cut the winter fuel allowance for pensioners - a move that's set to see around 10 million stripped of the allowance.

The hike will now see the cap raised from £1,568 to £1,717 from October 1 for a typical household in England. Scotland and Wales.

Speaking following the news, the Department for Energy Security and Net Zero said that news of the energy hike was "worrying".

The move means an extra £12.41 a month will be added to the average bill from October.

The energy regulator has blamed higher international energy prices triggered by geopolitical tensions and extreme weather events for the rise.

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On Friday, the regulator encouraged "people to shop around and consider fixing if there is a tariff that’s right for you".

It puts increasing pressure on Home Secretary Rachel Reeves, who announced last month that she would scale back payments to pensioners.

Secretary of State for Energy Security and Net Zero, Ed Miliband, said: “This will be deeply worrying news for many families.

"The rise in the price cap is a direct result of the failed energy policy we inherited, which has left our country at the mercy of international gas markets controlled by dictators.

“The only solution to get bills down and greater energy independence is the government’s mission for clean, homegrown power.

"That's why we have hit the ground running, lifting the onshore wind ban, consenting unprecedented amounts of solar power and setting the largest ever budget for our renewables auction," Mr Miliband added.

“We will also do everything in our power to protect billpayers, including by reforming the regulator to make it a strong consumer champion, working to make standing charges fairer, and a proper Warm Homes Plan to save families money.”

Despite prices now being far lower than at their peak, the cap rise will affect millions of households across the UK.

Prices also remain well above pre-Covid pandemic levels - despite assistance being cut.

It comes as 84% of British people surveyed by smart thermostat manufacturer tado° said they do not believe energy bills will fall back in line with those seen in 2021.

One reason for the continued rise despite wholesale prices falling is said to be the knock-on effect of the Ukraine war, according to experts.

Tado° co-founder, Christian Deilmann, says the shift "shows how vulnerable we all remain" to energy price shifts and "why it is important to take control of your energy consumption.“

"Our survey shows the vast majority of people are realistic that they will continue to face high energy bills and they are more concerned about that than five years ago. It is never too late to protect yours."

The news has seen many campaigners up in arms, notably pensioners, many of whom have incomes that fall pennies above the eligibility threashold for winter fuel allowance assistance.

Jonathan Brearley, CEO of Ofgem, said: “We know that this rise in the price cap is going to be extremely difficult for many households.

"Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support."