Energy bills for the average household in Britain are projected to rise substantially in only a few months after this week's price cap announcement from Ofgem.
Households are being urged to prepare for the pending hike in costs but how much will you pay and when does this price increase kick in?
How much are energy bills rising and when will costs go up?
The typical household will see their energy bills go up by £149 later this year.
This comes following a period of lower gas and electricity prices in 2024 following a multi-year period of soaring energy costs.
Families should expect this increase in energy costs to come into effect from October 1.
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
The cost of living crisis has pushed energy bills to new heights in recent years GETTY Why are energy bills rising?
Britons can expect their energy bills to rise this autumn thanks to Ofgem's decision to raise the country's price cap.
This week, the regulator confirmed it was raising its price cap in response to external pressures on the wholesale market.
With this decision, Ofgem is boosting the energy price cap from the current £1,568 for a typical household in England, Scotland and Wales to £1,717.
Despite this hike, the restriction remains around £117 less expensive than the price cap from last October, which came to £1,834.
What is the energy price cap?
Every three months, Ofgem updates the cap which is a limit on how much energy firms can charge per unit of gas and electricity.
Introduced in 2019, it is place to ensure families are not paying any more than they have to however it is not a cap on overall energy bills.
Any household which uses more energy than the average will still pay higher energy bills.
Someone is covered by the energy cap if they have a standard credit, direct debit, prepayment meter or Economy (E7) meter.
Les Roberts, an energy expert at comparison site Bionic, outlined why energy prices in the UK are forecast to skyrocket in the near future.
He explained: "Currently, the UK imports a significant portion of its energy. Increasing wholesale prices (the amount suppliers pay for the energy they provide to homes and businesses) are thought to be the main reason for the energy price cap increase.
LATEST DEVELOPMENTS:
Acquisition-only tariffs offered cheaper prices only for new customers to lure them away from their existing supplierGETTY"Although the Labour Government plans to introduce ‘Great British Energy,’ to help cut energy bills and enhance energy security, this won’t supply energy directly.
"Instead, it will invest in renewable technology and work with private companies to decrease reliance on energy imports, potentially leading to more stable prices."
"However, establishing this new publicly-owned company and scaling up renewable energy investments will take time. And the energy market will also need reforming so customers get the full benefit of cheaper energy from renewable sources.
"But the weather is about to start getting colder, which means energy use will increase and households will be faced with bigger bills to pay, so it’s important to start making changes ahead of the price cap increase."
