Energy bills could jump by £100 a year despite government cap on prices
Energy bills could shoot up again, as a government cap fails to tackle increasing costs
BRITAIN'S energy bills could jump by £100 a year by next April, analysts have warned.
The initial hike could start impacting consumers from as early as October this year.
The increase comes despite the upcoming introduction of the government’s new price cap in December, which promises to keep costs under control.
Energy regulator, Ofgem, has already signed off a £47 a year increase in its energy safeguard tariff for vulnerable consumers this coming winter.
But energy analyst Cornwall Insight is predicting that both tariff caps could rise by another £50 to £55.
This means that by April next year, we could be paying £100 more on our bills.
Gareth Miller, chief executive of Cornwall Insight said: "Household energy prices are set to continue to rise despite Ofgem's safeguard tariff or the government's default price cap.
“Only if wholesale costs fall sharply will the pressure abate.”
How does the price cap work?
REGULATOR Ofgem will be introducing new energy price caps from December this year.
The caps are designed to protect consumers from paying rip-off energy charges.
They will cover standard variable and default energy tariffs - some of the most expensive around.
Around 12 million UK households are currently languishing on very expensive standard tariffs, usually after failing to switch when a fixed-term deal comes to and end.
The cap will be in place for at least two years, although it could be extended.
But that doesn't mean energy bills can't go up.
Every six months, the government will review the cap and determine how much energy providers can charge.
Why prices are continuing to rise
Analysts have regularly warned that Ofgem's price caps will do little to stop energy bill increases.
This is because the level the cap is set at depends on factors such as wholesale prices. As long as these continue to rise, our bills will too.
Stephen Murray, energy expert at comparison website MoneySuperMarket explained: "The price of standard variable tariffs has risen by around £140 on average (from the big six) since the policy announcement of an energy price cap by the government in May 2017.
MORE ON MONEY STORIES
"The cap will be based on a calculation that will have industry and wholesale costs at the heart of it. If they go up, Ofgem will be forced to reflect this in its six monthly review of the cap level.
"It is not sustainable to keep prices below market forces particularly if suppliers are required to meet government and environmental policy costs."
So far, the big six energy companies have all announced at least one price hike this year.
But consumers should brace themselves for potential future rises throughout the year.
Earlier this month, British Gas announced that customers could expect a 3.8 per cent hike from October 1 after already putting prices up by 5.5 per cent back in May.
How to beat the hikes
THE only real way to beat energy price hikes is to make sure you switch annually when your current deal ends.
The good news is that it's relatively straightforward to do.
Check that your new provider is signed up to the .
This means that it will take responsibility for the whole transfer process.
It also means you'll get a seamless transfer, meaning you won't be left without lights for a couple of days.
If there are any problems, your new provider will work to resolve them quickly as part of the guarantee.
And any credit you're owed will be in your account within 14 days.
Make sure you shop around. Finding the right deal can save you as much as £300 a year.
Use at least two different comparison sites to make sure you're getting the best bargain you can.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at [email protected] or call 0207 78 24516. Don't forget to join the for the latest bargains and money-saving advice.