The energy tariff cap is set to rise by 9 percent at the same time as millions of pensioners lose the Winter Fuel Payment worth up to £300.
Industry experts are predicting the cap on tariffs will rise in October through to January as millions turn on their heating to survive the winter chill.
Analysts at Cornwall Insight are predicting the increase in the price cap tariff means the annual bill – based on typical use – will rise £146 taking it up from £1,568 to £1,714.
It also believes that – based on current movements in wholesale prices – that there will be another small increase in January through to March.
The increases come at the same time as the Chancellor Rachel Reeves has announced that the Winter Fuel Payment – worth £200-£300 – has been axed for many pensioners.
The official announcement will be made by the energy industry regulator Ofgem on Friday. However, Cornwall Insight has a good track record with its predictions.
Fuel poverty campaigners have sounded the alarm over the removal of the Winter Fuel Payment at the same time as bills are rising.
They have warned it could amount to a death sentence for sick and vulnerable people who will go cold this winter.
There are also concerns that the Household Support Fund (HSF), which offers grants to helps people on low incomes who are experiencing hardship or crisis, will be axed.
Simon Francis, coordinator of the End Fuel Poverty Coalition, warned: “The reality is that bills will go up compared to today and will be around 65 percent higher than they were before the energy bills crisis started.
“But instead of offering help, the Government has axed winter fuel payments to millions and refuses to confirm if the Household Support Fund will be extended.
“Not only do we need to see urgent movement on both these issues, but we need to see action to reduce energy debt and changes in the rules to reset Britain’s broken energy system so it is on the side of consumers.
“We back the Government’s ambition to bring down bills in the long term through more renewables and a Warm Homes Plan, but it also needs to look at shorter term measures too.”
Cornwall Insight said: “While prices have stabilised somewhat compared to the previous two years, the market has not fully recovered from the energy crisis and the impact of Russia‘s invasion of Ukraine. As a result, the market remains highly sensitive to any global events that could disrupt supply.
“The UK’s reliance on imported energy leaves the country very vulnerable to this global volatility. This is seeing both household and business energy bills forecast to staying far above pre-crisis levels.”
The company said there is an urgent need to protect the vulnerable against rising energy bills in the short-term. It said this could involve the introduction of cheap social tariffs for those on low incomes, revising benefits, or adjusting the price cap mechanism.
It said a new long-term approach should involve as shift towards towards sustainable, home-generated energy to reduce the UK’s vulnerability to international shocks.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said the threat of higher bills “is not the news households want to hear when moving into the colder months”.
He said: “Following two consecutive falls in the cap, I’m sure many hoped we were on a steady path back to pre-crisis prices. However, the lingering impact of the energy crisis, has left us with a market that’s still highly volatile and quick to react to any bad news on the supply front.
“Despite this, while we don’t expect a return to the extreme prices of recent years, it’s unlikely that bills will return to what was once considered normal. Without significant intervention, this may well be the new normal.
“The government will need to adopt a two-pronged approach to tackle rising energy bills. Immediate action is needed to ease the financial burden on households – such as the introduction of social tariffs, or reform of the price cap – but that’s only part of the solution.
“We must also develop a long-term strategy to secure our energy future. This means a fundamental overhaul of our energy system, with a strong emphasis on increasing domestic energy production.
“Simply waiting for prices to drop on their own isn’t an option, we need a proactive and forward-thinking approach to ensure long lasting energy affordability and security.”
Richard Neudegg, director of regulation at Uswitch.com, said: “Energy bills are going to rise just as we reach the season to switch the heating back on.
“A predicted 9 percent rise in energy costs would add £146 a year to the energy bills of the average household on a standard variable tariff.
“The price cap is expected to rise again in January, but bill payers can take action now to lock in certainty on how much they pay.
“There are a number of 12-month fixed deals available at rates cheaper than today’s firm prediction, so run a comparison to see what energy tariffs are available to you.”
