British Gas is the first of the big energy firms to announce it will be hiking its prices as of April, following the price cap announcement.

Default tariff customers will see bills increase £97 – from £1,041 to £1,138 a year – affecting 2.3million customers. The increase will amount to a total of £229million. 

The news follows Ofgem’s decision to raise the energy price cap by £96 to £1,138 for the six month period from 1 April.

Default tariff customers with British Gas will see their bills increase by £97 to £1,138 a year

Default tariff customers with British Gas will see their bills increase by £97 to £1,138 a year

Default tariff customers with British Gas will see their bills increase by £97 to £1,138 a year

The energy price cap was launched in January 2019 by watchdog, Ofgem, as a way of keeping down the cost for households across the UK. 

The new hike will come in on 1 April for six months with the changes blamed on a rise in wholesale energy prices.

However, it was an unpopular decision as many households are living through a time of financial difficulty, due to the ongoing pandemic. 

This is Money contacted British Gas for a comment about the increase but it declined to comment.  

Tom Lyon, director of energy at Energy Helpline, said: ‘News of this price rise couldn’t come at a worse time for British Gas customers, after almost a year coping with higher energy bills due to lockdown restrictions.

‘Although Ofgem has given a green light for price rises on default tariffs from April, energy suppliers are not obliged to hike the bills for hard-pressed consumers.

‘We call on British Gas’ rivals to do the right thing by their customers and hold off any increases, especially as hopes rise for the easing of restrictions from the vaccine roll out.’

Warning: Experts have said the increase will be detrimental to many homes already in debt

Warning: Experts have said the increase will be detrimental to many homes already in debt

Warning: Experts have said the increase will be detrimental to many homes already in debt

It is expected that many other energy firms will also rise their prices in response to the price cap announcement.

Companies were previously criticised for treating the cap as a target as opposed to an upper limit. 

Experts also warned that many homes are currently in debt to their energy supplier meaning a hike in prices will be detrimental.  

Lyon added: ‘With the number of homes in the red to their energy provider already at a record five-year high, the surge in debt is only set to get worse with the prospect of further price rises.

‘That’s why we are also calling on the Government to look at ways to help households with spiralling energy costs, for example by temporarily cutting VAT and reforming the Cold Weather Payment so it better helps the most vulnerable to keep warm.’

The price cap affects some of the most expensive deals on the market but fixed deals are unaffected.

Therefore customers are encouraged to use a price comparison service to switch to a competitive fixed tariff which will lower bills and lock in prices for 12 months or more. 

Could you cut your energy bills… or help the planet and go green? 

Millions of people could be needlessly overpaying for their energy as they fail to switch to providers who offer cheaper deal.

They may also be missing out on the opportunity to help the planet and fight climate change, by switching to green deals that offer electricity from renewable sources and more environmentally-friendly gas.

With our partner, Compare the Market, you can compare energy tariffs and exclusive deals.

Why not find out if you could save hundreds of pounds a year on your energy or go green?

>> Check to see if you can start saving money now

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This post first appeared on Dailymail.co.uk

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