Energy bills to rocket to £3,549 a year as price cap hike confirmed – how to get help now

ENERGY bills are set to rocket to £3,549 on average per year, piling further misery onto households.

The energy regulator confirmed the new price cap, which comes into effect on October 1, this morning.

The rise will hit 24million households, with four million of those on prepayment meters.

Over nine million more households have moved on to the standard variable tariff since October last year after more than thirty energy suppliers went bust.

Energy bills have rocketed 35 times faster than wages.

Those who pay their energy bills by direct debit will see their bills increase by 80% from £1,971 to £3,549.

Those who don't pay for their energy by direct debit will see their bills hiked from £2,100 to £3,764.

Meanwhile those on prepayment meters will see their bills increase by £1,591 as the price cap for these customers moved from £2,017 a year to £3,608 a year.

We've explained the exact amount that the four million prepayment customers will pay from October.

High energy bills are contributing to a rapid rise in inflation and the Bank of England warned earlier this month that households should prepare for a 15-month recession as inflation hit its highest level in 42 years.

The cost of living has risen substantially in recent months and the hike comes in the same week that the investment bank, Citi, warned that rising wholesale gas prices could push inflation to a 46-year high of 18.6% in January.

The bleak winter ahead will leave many Brits asking if it's justifiable that energy bosses are taking home a staggering £15million, while hard-up households face choosing between heating and eating.

Jonathan Brearley, chief executive officer of Ofgem, said: "We know the massive impact this price cap increase will have on households across Britain.   

"The price of energy has reached record levels driven by an aggressive economic act by the Russian state. Ofgem has no choice but to reflect these cost increases in the price cap.  

"The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year." 

Chancellor, Nadhim Zahawi said: "I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners."

Martin Lewis was brought close to tears as he explained the "catastrophic" rise to energy bills on BBC Breakfast.

National Energy Action, has warned that the rise in the energy price cap will mean 8.9million households will fall into poverty this autumn.

On the same day that the new price cap comes into force, households across the country will start to receive a £400 energy bill discount from their suppliers.

It means that bills will be reduced by £66 each month, for six months.

However, consumer group, Which? recently called on the government to boost this discount to £1,000.

The price cap is expected to go up again in three months time and energy experts at Cornwall Insight predict bills could hit £4,649 in January and £5,341 from April.

Soaring wholesale gas costs due to supply issues and the war in Ukraine mean energy firms are passing on high prices to customers.

The energy price cap, set by the regulator Ofgem, limits the maximum suppliers can charge customers for each unit of gas and electricity on the standard variable tariff.

Right now, the current rates for duel fuel tariffs are:

• 7p per killowatt hour (p/kWh) for gas
• 28p/kWh for electricity
• A standing charge of 27p per day for gas
• A standing charge of 45p per day for electricity

From October the first the new rates will be:

• 15p per killowatt hour (p/kWh) for gas
• 52p/kWh for electricity
• A standing charge of 28p per day for gas
• A standing charge of 46p per day for electricity

The price cap does not protect customers from wholesale prices.

This means it's not a cap on how much you can be charged for the energy that you use.

So if you use more energy than the typical households you should expect to pay more.

If you use less energy than the typical household you could pay less than the price cap.

If you're on a fixed deal then you don't need to do anything right now and you won't see a rise in your bill until your deal ends.

If you fixed rate is up you'd be better off letting your contract roll-over onto the standard variable tariff as there are no fixed energy deals meaningfully cheaper than the price cap right now.

Can I get help from my energy supplier?

Yes, energy suppliers do offer support for those who are struggling to pay their bills.

Those on Universal Credit and older legacy benefits could get over £3,000 in bill support.

There are plenty of energy grants and schemes open to help you out if you're struggling.

British Gas has recently confirmed that it'll pay its most vulnerable customers grants worth £750 to help with sky-high bills.

Ask your supplier what's on offer and how to apply, or check here:

There's also a one-off fuel voucher from your energy supplier if you're on a prepayment metre.