Household energy bills to rise more than £100 a year

The energy price cap is set to rise by 6.4 per cent in April, marking the third straight increase in a row.

- KARL MATCHETT ALBERT TOTH

While it means many households across the UK will be paying more for their energy bills, it is a slightly lower increase than some had forecast, with up to 7 per cent initially being feared.

However, last week Cornwall Insight forecast that the cap could rise by as low as 5 per cent. The new price cap is set at £1,849 from April onwards, an increase of £9.25 per month from the current rate – or £111 a year for typical households using gas and electricity.

Ofgem is the regulator that sets the maximum rate households can be charged for energy, using the price cap to ensure customers are not excessively paying for gas and electricity.

On 1 January the price cap rose around 1 per cent to £1,738 a year, with each announcement setting the price for the forthcoming three months. Rates apply to standard or default variable tariffs from suppliers, paid by direct debit. Amounts are slightly different for prepayment and other payment methods.

EDF Energy has predicted that the price cap could rise again in July and October by smaller amounts, between 1 and 3 per cent, before stabilising by January 2026. The price change reflects the cost of energy production and supply for firms before they provide it to households.