The energy price cap will rise again - sending the average household bill rocketing to £3,549 from October, regulator Ofgem has announced.
This means the yearly gas and electricity bill for the average household will rise from from £1,971 - more than 80 per cent. Energy bills will be around £2,300 more than a year earlier.
The announcement came today amid the worsening cost-of-living crisis, with petrol and household item prices soaring and taxes and interest rates also going up. Households have been told to brace for a tough winter, with families having to come up with the money to pay bills or face living in the cold.
READ MORE: Everything you need to know about the energy price cap change
The new price cap - announced amid soaring global gas prices - will last for three months from October 1. But from January, analysts expect the cap to rise again to £4,200.
It is believed that around 24 million households in the UK have their domestic energy bill decided by Ofgem's price cap. A price cap is also decided for customers on prepayment meters which are separated from those with variable tariffs.
It is now likely to be a nervous wait until September 5, when the new prime minister takes office. As they wait for government help, many will try to reduce bills by keeping their homes colder, cooking in bulk and taking shorter and less regular showers.
Experts also say that turning down the flow temperature on your boiler and switching off your boiler’s pre-heat mode can save hundreds of pounds this winter. But such savings are likely to offset only a small proportion of the mammoth price cap.
Families will have to come up with the money somehow, or face winter living in the cold. Around 45 million people in the UK could be thrown into fuel poverty as a result, according to a study from the University of York.
Rocio Concha, the director of policy and advocacy for Which?, said that six in 10 households are cutting back on essentials or dipping into savings, even ahead of the bill rises. It 'reinforces the need to urgently deal with this crisis before many more families are pushed into the difficult choice between heating or eating', she said.
"The government must move quickly to increase the amount of financial support it is providing to help households make ends meet and work with businesses to look at what more they can do for those facing serious financial hardship", she added.
Measures already announced include a £400 discount on energy bills for every household from October, with further help for those deemed vulnerable, such as pensioners and the disabled.
The chief executive of Ofgem has urged the incoming prime minister to 'act further' to tackle the impact of price rises as he announced that the energy price cap will be hiked by more than 80 per cent from October.
Jonathan Brearley said the government would need to add to the support it announced in May when bills were only expected to jump to £2,800.
“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,” Mr Brearley said.
“We are working with ministers, consumer groups and industry on a set of options for the incoming prime minister that will require urgent action.
“The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
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