British Gas customers have been told exactly how much their personal energy bills will increase by from the New Year.
The energy giant has given households the bad news after Ofgem raised its energy price cap by 5 per cent, with the hike kicking in from 1 January.
British Gas has offered customers the option to take out a fixed rate deal and said that if it launches a cheaper deal after that then they can switch for free – but if they jump ship for another supplier they could face charges to leave.
Ofgem will increase its price cap by 5 per cent from the current £1,834 for a typical dual fuel household to £1,928. Energy prices are below their highest levels but remain high due to market instability and global turmoil, including the ongoing war in Ukraine.
The price cap will rise in January but is expected to drop slightly in the Spring before rising again for winter 2024
Customers have been emailed by the energy company in the last couple of days to inform them of their updated estimated annual costs.
One customer with much lower than average bills told MailOnline and This is Money their tariff will rise from £512.63 to £529.59, an estimated annual increase of £16.96.
It comes after last month Ofgem announced the average household energy bill will rise by £94 a year.
The news came as a blow to households already struggling with the high cost of living, and provides an unwelcome reminder that the inflation crisis is far from over.
Chancellor Jeremy Hunt made no mention of any further help to offset household energy bills in his Autumn Statement.
British Gas customers have been told exactly how much their personal energy bills will increase by (stock image)
British Gas has launched a one-year fixed tariff that is priced below the January 2024 price cap and which is available to new and existing energy customers.
In a blog post, the energy company says: ‘With a fixed energy tariff you’ll be charged the same rate for your gas or electricity and your standing charges, until your contact ends. This shields you from price rises. Remember – it’s the cost per unit rate and standing charge that’s fixed and not your bill.
‘If you choose a fixed energy tariff now, and we launch an even better fixed tariff in the months to come, you can swap to it for free. We won’t charge you exit fees if you move from one British Gas fixed tariff to another fixed tariff. We will charge exit fees if you leave us for another supplier though.’
MailOnline and This is Money contacted British Gas for comment.
The energy price cap sets a limit on the maximum amount suppliers can charge households in England, Wales and Scotland for daily standing charges and each unit of gas and electricity.
That applies to homes on variable-rate tariffs paying by direct debit – more than 80 per cent of all households.
Energy in Northern Ireland is regulated separately.
The headline price cap figure is an average across households rather than an absolute cap on bills, so those that use more energy will pay more.
Ofgem chief executive Jonathan Brearley previously said: ‘This is a difficult time for many people, and any increase in bills will be worrying.
‘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.’
Emily Seymour, energy editor at consumer magazine Which?, said: ‘If you are concerned about struggling to pay higher bills, don’t suffer in silence, there is help available.
‘Speak to your energy provider about a payment plan you can afford and check to see if you qualify for any government schemes.
‘We’d recommend that everyone without a smart meter takes a meter reading on or close to December 31 to make sure they don’t overpay for any energy used before the new price cap takes effect.
‘Submitting meter readings on a regular basis is a good idea, and makes sure you are billed correctly.’
