Household energy bills set to rise by £60 per year

Household energy bills are set to rise by £60 per year, with a 4% increase from October's price cap.

A typical household using gas and electricity will pay an additional £60 per year, bringing the total bill to £1,723.

The increase is due to rising wholesale costs of gas, which have exceeded expectations. Suppliers are struggling to meet demand, leading to higher prices for consumers.

Ofgem has confirmed that the price cap will rise by 4% compared to this year's level, with a significant impact on households on fixed tariffs.

More than a third of households are now on fixed tariffs so their prices will not change. The government says VAT is being cut from electricity bills in October, including for those on fixed deals, with Energy Secretary Miatta Fahnbulleh saying ministers will 'keep looking at what more we can do to protect families from unaffordable bills.

However, analysts at the energy consultancy Cornwall Insight have forecast domestic energy prices may rise a further 9% in the new year, bringing renewed concern to households at the coldest time of the year. The energy cap sets a maximum price for each unit of gas and electricity, not the total bill, so a household's final bill depends on what they use.

Ofgem said the price cap will rise by £60 per year – or £5 per month – to £1,723 for the average household using both electricity and gas if this level was sustained for a year. The government has also announced plans to increase funding for energy efficiency schemes in an effort to reduce energy bills.

However, analysts at the energy consultancy Cornwall Insight have forecast domestic energy prices may rise a further 9% in the new year, bringing renewed concern to households at the coldest time of the year. The energy cap sets a maximum