Feeling the heat: Household energy bills are set to rocket by as much as 6% (Image: Getty)
Millions of squeezed households have been dealt a fresh cost of living blow with energy bills set to rise twice in three months.
Analysts have forecast the energy price cap will leap between 3-6% from April 1 - and again in July.
It means the average gas and electricity bill will soar to between £1,796 to £1,847.
The upshot is yet more misery for those who have struggled with the mounting cost of heating homes and feeding families.
Financial guru Martin Lewis, founder of the website Money Saving Expert, said: “We’re only a couple of weeks from the end of the assessment period, so that means this is getting pretty firm. It’s now nearly unthinkable that it’ll drop, it’s going to rise, the big question is how much.”
Even at the lower estimate the expected energy price cap increase would represent a 3 per cent rise from January’s £1,738 a year.
The rate applies to a home with average energy use, on a variable-rate energy tariff and paying by direct debit. The cap will vary depending upon where in the country someone lives, with the projected figure representing the national average.
Experts initially thought bills would rise to £1,762 by April, but experts have revised their forecasts. And there could be more bad news with energy suppliers predicting an even steeper increase, a move blamed on heftier wholesale prices.
This is blamed on energy volatility from global events like the ongoing – war and uncertainty during the early days of ‘s presidency which has seen the threat of trade tariffs.
The average cost of household heating will be between £1,796 to £1,847 from April 1 (Image: Getty)
The energy price cap is a limit on the unit rate and standing charge suppliers can charge.
All households have to pay a standing change, meaning any increases disproportionately affect those who use less energy.
The energy price cap covers 26 million households in England, Wales and Scotland and is set every three months, by energy regulator Ofgem.
It fixes the maximum price that can be charged for each unit of energy on a standard – or default – tariff for a typical dual-fuel household which pays by direct debit.
Between January 1 and March 31, gas prices are capped at 6.34p per kilowatt hour (kWh), and electricity at 24.86 per kWh.
It means the annual bill for a dual-fuel direct debit household using a typical amount of energy went up to £1,738 per year, an increase of £21 from the previous revision.
In the winter of 2020/21 the cap was a modest £993. But during the autumn of 2022 and winter of 2023 it stood at an eye-popping £2,380 even though this amount was subsidised by taxpayers as part of the then government’s energy price guarantee.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight which carried out the projections, said: “This will be disappointing for households hoping for relief. Market volatility is making forecasts unpredictable.”
Mr Lewis added: “The predictions for what will happen to the energy price cap in April keep rising. EDF now predicts Ofgem will increase it by 3.3%, British Gas predicts 5%, Eon Next predicts 5.7%.”
The price cap for a typical dual-fuel household is in place until March 31. If it rises by 5%, as British Gas and Eon Next predict, it would jump by £86 to £1,824.
It comes as households in England and Wales will see an average 26% increase – or £123 a year – to water bills from April 1.
The rise, confirmed by industry body Water UK, will take the average water and wastewater bill from £480 to £603 for the next year alone.
April will also see a slew of additional price rises, including TV, broadband and mobile phone package deals, while businesses stomach a National Insurance rise which will see employers’ contributions increase from 13.8% to 15% and the threshold at which they start paying the tax decrease from £9,100 to £5,000 a year.