Experts predict energy bills will jump hundreds of pounds over the next year as wholesale gas prices continue to rise to record levels.
The upper limit for energy prices was raised to a record level this winter. Those using standard tariffs and using the typical amount of energy per household will see an increase from £ 139 to a whopping £ 1,277 per year.
Not only that, those who are into prepayment counters are also faced with a £ 153 increase.
By 2014 the “Big Six” energy companies controlled 90 percent of the market, until Ofgem (Office for Gas and Electricity Markets) allowed smaller providers to compete and potentially pushed prices down for consumers.
READ MORE: What is the energy price cap? Does it affect me?
However, the lower prices did not materialize and the UK continues to have one of the highest energy prices of any country in Europe.
Adam Scorer of National Energy Action, an energy poverty charity, said, “The massive, devastating rise in energy prices will drive over 500,000 more households into energy poverty, so they can no longer heat or power their homes.”
Will the energy price cap increase?
Energy experts Cornwall Insight claim the annual energy price cap could rise to £ 1,660 by next summer. That’s over 30 percent more than the winter 2021 cap of £ 1,277.
Meanwhile, The Energy Shop predicts the increase could be higher, closer to £ 500 more.
What is the energy price cap?
The energy price cap is the maximum fee that a provider can charge households for their standard tariffs, including the basic fee and the price per kWh of electricity and gas.
Ofgem sets the upper limit for summer and winter based on the cost of the energy supply to ensure that prices are fair to consumers.
Will the energy price cap affect me?
As you near the end of your energy contract, you may be automatically switched to a standard tariff at the new tier.
British households with fixed tariffs and plenty of time for their contracts don’t have to worry yet.