The typical gas and electricity customer is likely to see their bill go up by £139 to £1,277 a year

Struggling families will be hit hardest just as cold weather begins to bite – as greedy energy companies have been allowed to hike prices.

A price cap for domestic energy deals will be raised by 12% in October to cover suppliers' extra costs, regulator Ofgem has announced.

This means that the typical gas and electricity customer is likely to see their bill go up by £139 to £1,277 a year.

The hike will happen just as the weather turns colder and energy consumption rises – and as the Tories push through their plans to cut £20 from Universal Credit and end the furlough scheme.

Ofgem said that the raising of the cap – introduced three years ago supposedly to protect consumers against companies’ hiking prices – is driven by a surge of more than 50% in wholesale fuel costs over the last six months with gas prices hitting a record high as global economies recover from the Covid crisis.

Raising the cap will allow companies to increase bills, with no plans by the big six energy companies – which includes Scottish Power – to offset.

This is despite the fact that their profit margins are in the billions every year.

Charities have warned of a “perfect storm” of rocketing bills and reduced income in the autumn – and say the most vulnerable will suffer.

Citizens Advice Scotland fair markets spokesperson Kate Morrison said:  “News of this increase points towards a perfect storm for consumers, with higher bills coinciding with an end to the furlough scheme and proposals to cut Universal Credit by £20 per week, 

“Lots of people are struggling just now. One in seven people are struggling on their present income according to polling for CAS. That’s before higher bills and lower incomes this autumn.

“That this increase seems to be driven by the increasing cost of fossil fuels should also focus the mind ahead of Cop26 in Glasgow this year. It’s another example of why we need to switch to low carbon heating as alongside the right actions from government it will be cheaper for us all in the long run.”

She added: “If people are struggling with energy bills they can also turn to the Citizens Advice network for support. We can help you with specific energy advice as well as ensure you are getting all the money you are entitled to.”

Advice Direct Scotland recently took on the Scottish Government-supported delivery of energy advice in Scotland and launched the energyadvice.scot platform.

The organisation also published a poll in June which found that more than a third of Scots are worried about paying their monthly bills, and nearly a third limited their energy use over the past year so they could afford to spend money on other goods and services.
 
Andrew Bartlett, chief executive, said: “These looming price rises will inevitably concern many families across Scotland. The increases will come in just as the cold weather starts, making it even harder for households.

“We know that more than a third of Scots are already worried about paying their monthly bills, and many have been rationing their energy usage, so this will add to the anxiety.

“Energy bills and energy contracts can be a minefield for consumers, which is why we launched energyadvice.scot earlier this year. Free and practical advice is now available to anyone in Scotland through whatever form of communication they prefer - over the phone or digitally.”

People can contact energyadvice.scot by freephone 0808 196 8660, on Facebook, email or through live web chat.