Energy bills could hit almost £4,000 next year, as shocking new analysis shows these costs could be much higher than feared.
UK household finances have already been buckling under the cost of soaring energy bills - but further increases are coming.
Energy bills for more than 80% of UK homes are limited by a price cap set by regulator Ofgem.
This price cap rose on April 1, 2022, from £1,277 to £1,971 per year on average.
But the price cap is being reviewed again in October, and another worrying rise is predicted.
Ofgem chief executive Jonathan Brearley has said the new price cap will be "in the region of £2,800".
Energy consultants at Cornwall Insight then put the October price cap at the slightly higher £2,879 and £2,907 in January 2023.
But now energy experts at BFY say energy prices could hit £3,420 in October - then £3,850 when the price cap is reviewed again in January 2023.
A year ago in July 2021 the price cap was just £1,138 a year - and most energy deals were much cheaper than that.
Adam Jones, senior manager at BFY Group, told The Sun : “This is off the back of gas and power prices rising to all time highs.
"The winter 2022 gas price has risen nearly 10-fold since this time last year, and more than double the price of last winter’s gas.
“Official figures have an average income of £31,000, this means more than half the country could be pushed into fuel poverty.”
Justina Miltienyte, head of policy at Uswitch.com, said: “As we get closer to the announcement of the next price cap, the predictions keep rising higher and are now becoming impossible for policymakers to ignore.
“Predictions of January’s price cap hitting £3,850 - nearly doubling in just 12 months - will be deeply distressing to every energy bill-payer. It is also well above the prediction of £2,800 that the Government based its original support package on."
What is the Ofgem energy price cap?
Despite what its name suggests, the price cap isn't really a limit on how much you pay for energy - but it does work a bit like that.
Instead, it sets a limit on the rates a supplier can charge for each unit of gas and electricity you use and is reviewed twice a year.
The price cap is altered every six months, in April and October but Ofgem has proposed to change this to every three months instead.
This means it would be reviewed again in January.
Ofgem first introduced the price cap in 2019 and it is based on a number of factors including the wholesale cost of power in the previous six months.
Will my energy bills go up?
Households that are on the price cap are default tariff customers who are on a standard variable rate (SVR) tariff because they haven’t switched to a fixed deal.
This also applies to those who remain with their new supplier after their previous supplier exited the market - some 30 energy firms have gone under since 2021.
If you are on an SVR tariff, then you will see your bills go up in line with the price cap.
A government spokesperson said: "Unlike Europe, Britain isn't dependent on Russian gas. The UK’s secure and diverse energy supplies will ensure households, businesses and industry can be confident they can get the electricity and gas they need.
“However, we are vulnerable to volatile gas markets. While no national Government can control the gas price, we have introduced an extraordinary £37billion package to help households, including £1,200 each for 8million of the most vulnerable households."
