Up to 15 million households are set to see their energy bill increase by October this year because of a rise in wholesale energy prices, regulator Ofgem has said.

UK households will be asked to pay a further £139 within months at a time when many families are still recovering from the impact of the coronavirus pandemic.

The sharp rise will see default customers paying by direct debit see their bill rise from £1,138 to £1,277.

The announcement will impact half of the population and is mainly down to rising wholesale fuel costs, particularly gas, Ofgem say.

The energy regulator has introduced a cap on the price hike so that suppliers can “only pass on legitimate costs”.

Help is available

Jonathan Brearley, chief executive of Ofgem, said: “Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic.

“The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.

“If you’re struggling to pay your bill you can get in touch with your supplier to access the help that’s available and, if possible, shop around for a better deal.

“I appreciate this is extremely difficult news for many people, my commitment to customers is that Ofgem will continue to do everything we can to ensure they are protected this winter, especially those in vulnerable circumstances.”

"The perfect storm"

The price increase has led to concerns it could lead to the “perfect storm” as families continue to struggle following the pandemic.

Responding to the price rise, James Plunkett of Citizens Advice said: “This price hike could lead to a perfect storm for families this autumn, hitting people at the same time as a Universal Credit cut and the end of furlough. It’s particularly worrying given families on Universal Credit are far more likely to already be in energy debt.

“With bills rising and incomes falling, many families will find it hard to escape. For many, debt will be the inevitable consequence.

“It all adds to the growing case to rethink the government’s planned cut to Universal Credit and keep this lifeline which has been vital to keeping so many afloat.”