Millions of households will be hit with a more than £100 hike in their energy bills ahead of the winter, experts have predicted.
Regulator Ofgem revises a price cap for customers on standard or other “default” energy tariffs twice a year.
The last change, on April 1, saw average bills for 11 million households jump by £96 a year.
With wholesale costs soaring, consultants Cornwall Insight is forecasting the next change, on October 1, will result in a further rise of more than £100 a year.
It would take the average dual fuel bill for a customer paying by direct debit to £1,250 a year.
The last price cap change saw average bills for 11 million households jump by £96 a year
(Image: Tim Graham/Getty Images)
Dr Craig Lowrey, senior consultant at Cornwall Insight, said wholesale energy prices has seen some of the biggest increases since the “Beast from the East” storms of 2018.
“Wholesale prices have been hit by a combination of factors,” he said.
“Underlying commodity prices have risen, so, too, have carbon prices.
“On top of this, underlying gas prices have risen considerably due to a cold winter across Europe and low levels of gas in storage facilities.”
Dr Lowrey warned: “With a substantial increase in the wholesale price, it is extremely likely to expect this to be passed through fairly quickly in terms of prices to new customers.”
It comes amid concern about the number of people already struggling to afford to heat and light their homes.
Adam Scorer, chief executive at the charity National Energy Action, said: “At a time when many will fear the loss of Universal Credit or furlough ending, more price hikes going into autumn is the last thing people struggling with energy bills want to hear.
“Sorting out leaky homes is the long-term answer. “But greater support for those on the lowest incomes remains an immediate priority.
“Firms need to identify those who need help and support those who struggle to pay.”
How to cut the price of your energy bill
Earlier this year, Ofgem said households could save £100 by shopping around for a fixed deal – but the charity Citizens Advice estimates this saving even higher at £200 a year.
Either way, it is likely you can save yourself a tidy sum if you haven't switched supplier in a while.
To see if you could be better off elsewhere, use a comparison site to compare prices.
A guide on ofgem.gov.uk includes a list of approved price comparison sites.
Those who would rather not switch should contact their supplier and ask to be moved to a cheaper fixed tariff which should still result in significant savings on their energy bill.