Ofgem price cap: Millions prepare for huge energy bill price hike as price cap to be revealed

Many are bracing themselves for a large increase to energy costs ahead of price announcement on Thursday.

It comes as Ofgem' s new price cap will be announced on Thursday and is likely to add hundreds of pounds onto millions of homes across the UK.

The regulator's new cap for Scotland, England and Wales is to be announced at 11:00 am, and changes to the cost will take effect in April.

Chancellor Rishi Sunak is expected to speak following the Ofgem announcement.

Worries mount as Ofgem to reveal energy price cap on Thursday (Photo: Danny Lawson).

The energy cap is a measure – reviewed every six months – introduced by Government and implemented by the regulators designed to stop companies overcharging customers.

Analysts Cornwall Insight expect a typical household to face an annual increase of more than £600 on their energy bill, with a further increase of as much as £400 to come in the winter after the next cap is set.

It is understood that ministers have plans to provide loans for energy firms to help them cut money from customers' bills.

Talking about the price cap, Joe Malinowski, founder of the price comparison site The Energy shop, told BBC’s Good Morning Scotland on Thursday: “It’s going to be significant.

"The concern is that this is not the end. Up until a couple of months ago, this crisis was very much perceived to be a problem for this winter.

"However, because we’ve had political situations – Russia is a major supplier of gas into Europe through Germany and when there are supply shortages there it affects globally – there have been concerns since December that this could easily spill into this year.

"The UK Government has to step in.”

The news of the expected price hike comes as people across Scotland are facing a sharp rise in the cost-of-living this year, with food bills also rising.

Conor Forbes, head of policy at Advice Direct Scotland, said: “The looming announcement on the energy price cap will cause anxiety for many households, especially at a time when people are feeling the pinch and some face the devastating choice between heating and eating.“The most important advice is to remember that you don’t have to struggle alone."

Advice Direct Scotland offers free advice via moneyadvice.scot to help with personal financial worries and energyadvice.scot can support anyone with concerns about energy bills.

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