Ofgem has set out details of the energy price cap rise, increasing the cost of fuel bills by nearly £700 per year for millions of people.
Roughly 22 million households will be hit by the 54 per cent cap increase. It will bring average annual bills to £1,971 for those on direct debits or £2,017 for people using pre-payment meters – more likely to be low-income households.
Chancellor Rishi Sunak delivered a cost of living support plan to the Commons shortly after the Ofgem announcement, announcing a council tax rebate and £200 loan.
From just £3 per week
The new cap will come into force in April, when ministers will increase national insurance payments by 1.25 percentage points and, experts say, force people to choose between buying essentials such as food and keeping the lights on at home.
Sunak will offer council tax rebates of an average £150 to England’s households in bands A to D, with larger rebates for the most disadvantaged families. The devolved governments will receive funding to implement the same policy, the chancellor added.
He also announced a £200 loan for all households, which the government will cover upfront before customers repay energy companies in £40 instalments over the next five years. The loan – dubbed a “discount” by Sunak – will be handed out in October, when the energy price cap is scheduled to change again.