Energy bills hike for millions as price cap announcement imminent

The cap is predicted to rise by 49%, adding around £600 a year to an average household's bills.

Energy bills hike for millions as price cap announcement imminent iStock

Consumers are braced for the cost of their gas and electricity to rocket as the new energy price cap is set to be announced on Thursday.

At 11am, Ofgem will reveal the level of the energy price cap from April 1, 2022, with millions of households across the country expected to see their bills increase by hundreds of pounds.

The regulator has moved forward the announcement which had been scheduled for Monday, February 7.

The cap is predicted to rise by 49%, adding around £600 a year to an average household’s bills, with warnings that millions unable to heat or power their homes could be thrown into fuel poverty.

Government analysis estimates increase could mean a further 211,000 households in Scotland will not be able to afford to power or heat their homes.

Citizens Advice Scotland fair markets spokesperson Kate Morrison said: “In Scotland, one in three of us already find our energy bills unaffordable, and almost half a million people are cutting back on food to afford bills. That’s not a sustainable position for people to be in.

“People will be bracing themselves for a big increase in the price cap, which will come at the worst possible time as prices in the shops soar and incomes stay the same or even fall.

“We need to see urgent government action to protect consumers, particularly those on the lowest incomes, otherwise millions of people face being swept up in a rising tide of poverty, debt and destitution.”

Reports say the Prime Minister and chancellor Rishi Sunak have approved a move to deliver a £200 rebate off households’ energy bills – expected to be confirmed on Thursday.

It will help offset at least some of the massive spike in energy costs caused by the increase in global gas prices.

The Bank of England will also set its interest rates on Thursday, which could see a rise in the cost of borrowing.

It follows the UK’s cost of living surging by 5.4% in the 12 months to December, the biggest jump for 30 years.

As well as facing a jump in energy bills in April, National Insurance is due to rise by 1.25 percentage points for workers and employers.

Scotland’s finance minister, along with her counterparts in Wales and Northern Ireland, united to demand action on the “cost of living crisis”.

Scotland’s net zero and energy secretary Michael Matheson said: “I am acutely aware of the concerns that people have about rising energy bills, alongside growing cost of living pressures caused by factors such as inflation and rise in National Insurance.

“Collaboration between the UK Government and the devolved nations must be a vital component of any effective response to this situation, which is why it is deeply disappointing that the UK Government has not yet responded to these requests, or engaged the Scottish Government in any meaningful way, and I urge the UK Government, once again, to develop and engage in every possible action to tackle this issue.”

Conor Forbes, head of policy at Advice Direct Scotland, said: “People across Scotland are facing a sharp rise in the cost-of-living this year, with food bills rising and energy bills set to soar.

“This latest report and the looming announcement on the energy price cap will cause anxiety for many households, especially at a time when people are feeling the pinch and some face the devastating choice between heating and eating.

“The most important advice is to remember that you don’t have to struggle alone.

“At this difficult time for many, talking things through with an adviser can help.”

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