Millions of people in the UK will be affected by a hike in their energy bills from April as the regulator, Ofgem, removes a price cap on bills.
Energy bills could go up by almost £100 for 15 million households across the UK after Ofgem said suppliers could pass on the cost of rising gas and electricity prices to customers.
“Energy bill increases are never welcome, especially as many households are struggling with the impact of the pandemic.
"We have carefully scrutinised these changes to ensure that customers only pay a fair price for their energy,” said Ofgem chief executive Jonathan Brearley.
But consumer expert Martin Lewis, founder of MoneySavingExpert.com believes consumers will be shocked into action.
He said: "Many will be shocked by the price cap rising £96 per year on a typical bill – the silver lining is that it will hopefully shock some people into action.
"The cap may be a ‘fair’ price, but it is far from a good one.
"Over the last few years, it has been on average at least £200 a year more than the cheapest tariffs for switchers.
"This rise is really reverting it back to form – it was only artificially low until now on the back of the huge reduction in world energy prices, due to the early days of the pandemic."
He also issued an important warning for the tens of thousands of people who will flood towards comparison sites - as they won't show the right saving.
"The saving shown will be listed compared to the current price cap level, as if you’d stick on that for a year. It won’t include this big jump due to come, lasting at least six months, from April", he explained.
"That can only usually be factored in once energy firms publish their new, detailed rates for each region – which could be weeks away.
"So while I’d strongly urge everyone on a standard tariff to compare and find their cheapest supplier – don’t be put off by the relatively small saving shown. In reality it's likely to be much bigger."
Ofgem has strengthened protections for energy customers, and put in place new rules to help those struggling to pay their bills in the pandemic.
Your supply won't be cut off – disconnections of standard credit meters have been completely suspended, while new rules have been put in place to ensure prepayment customers get emergency or additional credit to ensure the lights stay on.
If people are having difficulty paying right now, he urges them to look on Ofgem's website.
