Household energy bills will jump by £94 a year from January after a 5% increase in the price cap. 

Ofgem blamed higher wholesale costs faced by suppliers for the hike, which will see typical annual household bills jump from £1,834 to £1,928. 

The regulator's chief executive Jonathan Brearley said: “This is a difficult time for many people, and any increase in bills will be worrying."

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He added: “But this rise — around the levels we saw in August — is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price that we all pay.

“It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills.

“We are also seeing the return of choice to the market, which is a positive sign and customers could benefit from shopping around, with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap.

“People should weigh up all the information, seek independent advice from trusted sources and consider what is most important for them, whether that’s the lowest price or the security of a fixed deal.”

The energy price cap sets a limit on the maximum amount suppliers can charge households in England, Wales and Scotland for each unit of gas and electricity.

Forecasts by energy consultancy Cornwall Insight suggest that the typical bill will fall back to £1,853 from the start of April, but will not drop below the current level until July next year.

 

The hike in bills was raised at First Minister's Questions. Humza Yousaf criticised Jeremy Hunt for failing to offer help with bills in Wednesday's Autumn Statement.

He said: "Well, energy bills remains significantly higher than two years ago due to a volatile energy market and the UK Government's complete and utter failure to act.

"So campaigns like Citizens Advice Scotland's 'Worried this winter' together with our current Home Energy Scotland campaign, which will drive vital referrals to HES warmer homes programme, they're extremely important indeed.

"I have consistently called on the UK Government to fully utilise the fiscal and policy levers at their disposal to introduce measures like a social tariff as a means to target support to those who need it the most, which unfortunately, they fail to do in the Chancellor's Autumn Statement, leaving those businesses and communities already facing fuel poverty to suffer even more."

 

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Hazel Knowles, energy lead for Advice Direct Scotland, said the price hike at the coldest time of the year would “alarm many people grappling with household bills.”

She added: “Costs are already hundreds of pounds higher than pre-pandemic levels, pushing people into debt and having to make difficult decisions about spending on even essential items.

“Given the challenging situation for many, it’s shaping up to be an incredibly tough winter.”