Ofgem confirmed today that the energy price cap will increase from 1 April for approximately 22 million customers.
Those on default tariffs paying by direct debit will see an increase of £693 from £1,277 to £1,971 per year. Prepayment customers will see an increase of £708 from £1,309 to £2,017.
The increase is driven by a record rise in global gas prices over the last six months, the energy regulator said, with wholesale prices quadrupling in the last year.
Jonathan Brearley, chief executive of Ofgem, said: “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.
“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, 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 true cost of supplying electricity and gas.
“Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.”
Ian Preston, director of household energy at the Centre for Sustainable Energy (CSE), added: “Households across the UK will face a record energy bill increase of 54% from April and millions of people will struggle to pay their bills and keep their homes warm, facing fuel poverty for the first time.
“While there is much that UK government can do to for low-income households – and we acknowledge that the Chancellor has announced a support package today – there are actions Ofgem can take, in line with its statutory remit and its consumer vulnerability strategy, to prioritise the needs of the most vulnerable consumers.
“Firstly, it could require energy suppliers to proactively contact customers who are self-disconnecting from their energy supply. Today’s price rises will result in more people switching their heating off. People are frightened of getting into debt. Someone we support on our advice line contacted us this morning to say they wouldn’t be able to put the heating on anymore. This is going to be the case for millions of people across the country.”