Millions of UK households will be hit with a surprise rise in energy bills after Christmas, Martin Lewis has warned.
The savings guru pointed out that Ofgem will update its price cap from January 1, up from its current level of £3,549 a year for the typical household to £4,279.
Households are currently covered by the Energy Price Guarantee, which has "frozen" the average bill at £2,500 a year - although this isn't an absolute cap on what you could pay.
The hike in the Ofgem price cap means the Government will have to subsidise bills by a larger amount.
Average prices will stay the same but you may see a slight difference in the rates you pay because there are regional differences in the Ofgem price cap rates.
It means UK customers could have their bills hiked in an unwelcome surprise.
"The energy price guarantee was meant to guarantee prices until the end of March – when we know the cost people pay will increase by 20%," Martin said.
"So it will come as a surprise to many to see prices change in January."
The MoneySavingExpert founder explained the change will be minimal for those paying by direct debit - but will hit prepay and pay on receipt of bills customers worst.
"It is disappointing to see more substantial increases, with some on prepay meters seeing rises of 1% which include most of the poorest in society," he added.
"I have already been in touch with the Department for Business, Energy and Industrial Strategy to ask if this can be looked at, as it does not seem fair.
"The bump up for those who pay in receipt of bills takes the premium for paying that way to more than 10% over direct debit.
"So while many like the extra control, it's important to be aware that with typical bills from January, you'll pay £260 a year for it."
The average typical bill for prepayment customers will go up from a £2,559 current annual cost to £2,579, a rise of 0.8%.
Pay on receipt of bill customers will see the bill rise from £2,715 to £2,754 – up 1.4%.
This is based on Ofgem's typical use of 2,900kWh of electricity and 12,000kWh of gas.
Grant Shapps, Secretary of State for Business, Energy and Industrial Strategy, also commented on the issue and said it "is marginal for most people."
He added: "Changes to bills here are about the way the price cap operates to reflect cost to serve, rather than related to the energy price guarantee."
The Tory MP is also raising awareness on how UK households can cup their energy bills by £350 with a few simple changes.
This includes turning down radiators in empty rooms instead of switching them off completely as your boiler will have to work harder to increase the temperature again.
Power-hungry devices such as TVs and computers should also be switched off at the plug when not being used to ensure they are not using electricity while on standby, it advises.
While washing clothes at 30C instead of 40C can get three cycles instead of two for the same amount of energy, it adds.
The Government advice also says that reducing combi boiler flow temperature down to 60C will help save energy.
Mr Shapps said: "No-one is immune to rising energy bills this winter so it's in everyone's interest to use every trick in the book to use less energy while keeping homes warm and staying safe.
"For very little or no cost, you can save pounds. It all adds up, so I urge people to take note of the advice in this new campaign and follow the easy steps to cut your fuel bills."
