Energy bills to climb to £2,000 a year for UK households, experts warn

British households could see their energy bills climbing to record heights of £2,000 a year from April 2022 as wholesale costs are forcing the regulator to increase price caps by over 50 per cent.

Ofgem reviews the price cap once every six months, and changes it based on the cost that suppliers have to pay for their energy, cost of policies and operating costs, among other things.

There has been a global shortage of gas supplies, colder weather has also impacted pricing as the demand increases.

Other factors include a low export rate of gas from Russia, low wind power generation and nuclear power plant shutting down.

Gas prices in the UK saw a rise of 8 per cent, seven times higher than expected prices in comparison to figures from previous years.

Ministers are reviewing options to reduce the spike.

Analyst at Investec, Martin Young told The Times: “With wholesale commodity prices remaining elevated, we suggest that the tariff cap could jump by 56 per cent reaching £2,000 [a year] for the summer 2022 period.”

Suppliers are being forced to keep standard tariffs lower than current costs of energy supplies, British Gas and Eon, are offering fixed price tariffs at over £2,500 a year.