Regulator Ofgem mentioned that the price cap for default domestic energy deals would be increased to cover suppliers’ extra costs.
The typical gas and electricity customer is expected to see their bill increase by £139 to £1,277 a year.
Charities cautioned that the timing would hit struggling families the most, who already face losing an extra £20 a week from Universal Credit in October.
The regulator said that prepayment customers would experience £153, from £1,156 to £1309.
Ofgem chief executive Jonathan Brearley shred with the BBC: “The reason the price cap going up is there has been a record increase in energy prices across the board, not just in gas and electricity but in petrol and diesel.”
He insisted customers shop around for the best tariffs, stating there were significant savings to be made by switching.
“You don’t have to live with this tariff. The price cap is a backstop. We’d encourage any customer, particularly those struggling to pay their bills, to contact their supplier, and get access to a wide-range of help and support,” he mentioned.
“This is a devastating increase,” stated Peter Smith, director of policy and advocacy at fuel poverty charity National Energy Action.
“Millions of household budgets are already stretched to the limit and this massive increase could not be coming at a worse time.”
Ofgem mentioned that increasing wholesale costs were behind the increase News, adding that the presence of the price cap meant households would save between £75-£100 a year.
The watchdog also mentioned that energy users could shift to a better deal to save up to £200.
But, the Resolution Foundation states that policymakers need to do more to help families close to the poverty line.
Jonathan Marshall, the senior economist, mentioned the government must emphasize widening the present warm homes discount scheme and withdrawing the planned removal of the £20 Universal Credit uplift. There should also be more dedicated support for families at risk of falling in to fuel poverty.