Energy bills ‘could increase to £1,900 following 48% rise in April’

Energy bills could increase to almost £1,900 after a predicted 48 per cent jump for millions of households in spring, it has been reported.

Customers are currently protected from soaring international gas prices by the cap on energy bills, which limits costs to £1,277 for an average household.

But Ofgem is going to announce a new price cap level on February 7 – before it comes into force on April 1.

The level has yet to be decided, though analysts have predicted a jump to £1,897.

A combination of high demand for oil and gas and increased green levies faced by energy providers are among the factors contributing to the increase.

The Government has several options on how to offset the energy price rises and protect households across the country.

They range from cutting the 5 per cent VAT on energy bills – a £100 saving – getting rid of some levies on energy bills, and expanding the warm home discount.

However, a Treasury source criticised slashing VAT on the grounds that it “doesn’t discriminate between the wealthier and less wealthy people.”

Cornwall Insight, an energy market analysis firm, predicts that the new ceiling could surge to £1,897.

Meanwhile, a survey by Age UK found that almost a quarter (24 per cent) of older people fear they will be forced to choose between heating their home and putting food on the table if energy bills increase substantially.

More than half (54 per cent) of those surveyed said they would have to heat their home less.

Caroline Abrahams, charity director at Age UK, said: “Many older people are reliant on the state pension as their main source of income and simply do not have the flex in their finances to cope with such enormous price rises.

“At Age UK, we are being contacted every day by desperate older people in this position, people for whom there are only ‘bad choices’ – ration your energy use, cut back on food or other essentials, or go into debt.”

She added: “Any older person who is finding it difficult to pay their bills, or who is worried about staying warm, can call us today – if we help you to submit a successful claim it could make all the difference.

“There really is no downside to checking you are receiving everything you are entitled to, so please come forward and let us help you make sure.”

A Government spokesperson said: “We know this has been a challenging time for many people, which is why we’re providing support worth around £12 billion this financial year and next to help households across the country with the cost of living.

“Our winter fuel payments are supporting over 11 million pensioners with their energy bills and we are continuing to encourage those eligible for Pension Credit, and the wide range of other benefits it can provide, to make a claim.”