UK households could face £166 energy bill hike in March

Lucy Harley-McKeown
·2 min read
Woman At Home Boiling Kettle For Hot Drink With Smart Energy Meter In Foreground
Analysis of the fixed tariffs ending during these months finds that the average increase to energy bills could be £166 per household. Photo: Getty

Nearly 250,000 households could be automatically switched onto more expensive "default" energy tariffs in March if they do not switch tariff or provider when their deal comes to an end.

According to new research by Comparethemarket.com, in March, there are 182 fixed energy tariffs coming to an end.

Analysis of the fixed tariffs ending during these months finds that the average increase to energy bills could be £166 ($230.64) per household.

Rolling off fixed term deals onto default tariffs could collectively cost UK households over £41m a year compared with their current energy costs.

The data and analysis also revealed that if customers do not switch when their fixed tariff ends, energy companies are set to benefit from a huge "inertia windfall."

Households that do not switch before April also face an additional increase to their bills.

READ MORE: Over a million UK energy customers who switched providers overcharged

Ofgem, the energy regulator, recently announced that the default energy price cap will change from its current level of £1,042, to £1,138. The increase of £96 includes an additional £23 that the regulator has allowed suppliers to recuperate from unpaid bills from households that have experienced financial difficulty during the pandemic.

Separate research from Comparethemarket.com's Household Financial Confidence Tracker shows that annual energy costs would only have to rise by an average of £85 in order to tip households with children at home into financial difficulty.

Peter Earl, head of energy at Comparethemarket.com said: “If you are coming to the end of a fixed term period with your energy supplier, it’s the right time to take action and see if you can get a better deal by moving to another provider.

“The impact that the pandemic is having on many people’s finance is becoming particularly stark, and as our latest research shows, the price cap increase is likely to push a number of households, particularly those with children at home, further into financial difficulty.”

Watch: Easy budgeting tips for when you leave home