Millions of people in the UK are set to see a rise in their energy bills from today as the new price cap comes into effect. The rise, effective from Friday, April 1, is around 54% higher than the previous cap and will see the average household paying around £693 more each year to heat their home.
The increases which were originally announced by Ofgem back in February will be a great source of worry for families around the UK, with Citizens Advice saying around five million people would be unable to pay their energy bills from April, even accounting for the support the government has already announced. It means the average bill rises to £1,971 per year - a rise of 54%.
Energy companies saw their websites and phone lines crash on Thursday as people rushed to give meter readings on the final day of March. British Gas, EON Next, Scottish Power and Shell reported technical issues throughout the day, with customers indicating on social media that they were still having issues on Friday.
Read more: Energy price cap rise: 5 key things you need to know as £693 rise comes in
On top of the new price cap rise, experts have already warned that customers should brace themselves for further increases to the cap in six months' time.
According to figures released by analysts at Cornwall Insight, which independently analyses the energy market, the energy price cap could go up by another 29% in October. It said this month that the estimated price cap could go up to £2,512 in October 2022 for the average dual fuel bill. This is lower than its earlier predictions, when the average estimated cost was said to be £2,950.
The reason is that because of the war in Ukraine, wholesale gas prices have risen significantly since this month's price cap was set.
Gareth Miller, chief executive at Cornwall Insight said: "The fall in our Winter price cap predictions is clearly going to be welcomed given the much higher figures that have been circulating recently. However, we have to remember that even at these levels consumers will still be seeing a significant increase from what will already be a 54% uplift in April."
It is important to note, however, that this prediction is likely to change if Ofgem makes changes to how it calculates the price cap, which it is expected to do.
Citizens Advice has warned the number of people unable to pay their bills would almost triple to one in four people in the UK – more than 14 million – if the price cap rises again in October based on current predictions. Citizens Advice chief executive Dame Clare Moriarty said: “The energy price cap rise will be potentially ruinous for millions of people across the country. The support announced so far from the Government simply isn’t enough for those who’ll be hit hardest. With the long-anticipated price rises now hitting, many more people will face the kind of heart-rending choices that our frontline advisers already see all too often.”
