British Gas bills set to rise by nearly £140 a year

Millions of British Gas customers will soon see their energy bills surge by an average of nearly £140 a year, after it became the latest firm to reveal price increases after Ofgem set the new price cap last month.   

Affected customers will see their bills rise by an average of 12.23 per cent, with the average annual cost of a standard variable tariff going up from £1,138.18 to £1,277.38. 

However, the country’s biggest energy supplier, will freeze direct debits for 2million households on its SVTs over the winter to help them manage the biggest energy price hike in years. 

Anyone who does not pay their British Gas SVT bill by direct debit, however, will see their bills rise from next month.

SVT price hike: Swathes of British Gas customers will see their energy bills surge by an average of nearly £140 a year

SSE and EDF both recently announced a 12 per cent price increase for every part of the country.

Eon and Scottish Power will also be upping the cost of their standard variable tariffs to the maximum permitted threshold, which is £1,277.  

SSE will hike the price of its default tariff from £1,137 to £1,276 a year, which is just £1 below the maximum permitted. SSE’s parent company OVO will increase its default tariff to £1,276.49. 

Around 15million households will see their energy bills soar by at least £139 after Ofgem hiked the price cap with a record increase of 12 per cent last month. 

The new cap comes into effect on 1 October. It is adjusted twice each year, in April and October, to account for fluctuating supplier costs.

Gareth Kloet, an expert from GoCompare Energy, said: ‘These increases will come into effect on October 1, so there’s still time to check your tariff and make sure that you’re not overpaying for your energy bills.

‘Our latest research found that just one in five people had switched their energy supplier in the last 12 months, and almost a third of people have never switched their energy provider at all.

‘But still the best way to avoid an increase in energy bills is to switch provider. 

‘On average, bill payers who switch could save up to £270 on dual fuel bills – which is almost twice as much as the price cap increase.’

Ofgem’s August’s increase took the cap to £1,277, marking a £139 increase on the previous cap announced back in April 2021. 

The price cap was introduced by the regulator to, in theory, ensure consumers always pay a fair price for gas and electricity.

However, rising global fuel prices are already ramping up inflation for consumers, making fixed rate energy tariffs, which are usually better value but not covered by the price cap, more expensive. 

Campaigners have warned that the energy bill hikes are coming ‘at the worst possible time’, and claim the shift could push around 488,000 households into fuel poverty. 

At present, about 4million people are already behind on their household bill payments. 

The price hikes will also emerge as pandemic-driven Government support, like the furlough scheme and the universal credit £20 a week uplift, close for good.

British Gas direct debit SVT freeze

While prices are on the up, British Gas is delaying increasing the direct debits of customers on its SVTs until February 2022, to, it claims, spare households a sudden heavy financial blow.

It will then distribute the higher costs across the warmer months when bills are usually lower.

The supplier said it wanted to give households ‘the option to create a bit of extra financial breathing space if they need it.’

It added: ‘We understand that the price cap increase comes at a very expensive time of year for some of our customers. 

‘The furlough scheme which has helped millions of people is coming to an end, parents are getting children ready for a new school term, and Christmas is on the horizon.’ 

Anyone on a British Gas SVT contract who does not pay their bills by direct debit will, however, start being charged the higher rates from the beginning of next month. 

At the end of last month, 112 fixed energy deals, which are not covered by the price cap, come to an end. 

Sarah Broomfield, energy expert at Uswitch.com, said: ‘The cost of not switching to a new plan when your deal comes to an end can be huge.’

Best energy deals: Could you cut your bills and go green?

Millions of people could be needlessly overpaying for their energy as they fail to switch to providers who offer cheaper deal.  

They may also be missing out on the opportunity to help the planet and fight climate change, by switching to green deals that offer electricity from renewable sources and more environmentally-friendly gas.

With our partner, Compare the Market, you can compare energy tariffs and exclusive deals.  

Why not find out if you could save hundreds of pounds a year on your energy or go green?

>> Check to see if you can start saving money now  

This post first appeared on Dailymail.co.uk