How much cash will you burn when the energy cap is raised? 

Struggling families could find their energy bills soar by more than £230 a year following a shock hike to the price cap. 

The cap — which limits the amount suppliers can typically charge for a unit of electricity or gas — will increase by an average of £139 a year.

Yet millions of households will pay even more. Those in larger properties, or with higher usage, will see bills soar, and those in certain parts of the country can also expect to be hit harder.

Bills shock: The energy price cap – which limits the amount suppliers can typically charge for a unit of electricity or gas – will increase by an average of £139 a year

Money Mail has also found that the cheapest energy deals are typically reserved for those with internet or who live in specific areas. Experts have warned of power bill hikes for months after a record increase in energy prices.

In April the cap was increased by £96 a year to £1,138. But the latest rise — which takes the cap to £1,277 — is the largest increase since the cap was introduced in January 2019, and a 23 per cent increase since the start of this year. 

Below, we unpick how stretched households are being hit even harder by the ever-rising cost of energy — and how you can save.

Families pushed to the brink

Regulator Ofgem sets the price cap twice a year. It affects 11 million households in England, Wales and Scotland who are on their supplier’s default deal. 

This accounts for half of UK households, who have never switched provider or whose discount deal has expired. The cap dictates how much a supplier can charge for a unit of energy used, so those who use more will pay more.

Around four million prepayment meter customers will also be affected, paying an extra £153 as the average bill jumps to £1,309. 

Households on fixed deals are not affected, but are still being hit by rising bills linked to the energy price surge. 

In the last 11 weeks, prices of the cheapest fixed deals have gone up by £117, according to comparison site energyhelpline, and experts say they expect this to continue.

A family on a default deal living in a four-bed detached house can expect their combined gas and electricity bills to increase from £1,840 to £2,078 from October when the new price cap comes in, according to provider Octopus Energy.

This means they will need to find an extra £238 a year — £100 more than the price cap increase — and 13 per cent more than before. The same family in a three-bed terraced house could expect their energy to cost £151 more a year.

A single pensioner living in a two-bed property will see bills increase by £140 a year, whereas a young couple in a two-bed flat will pay £119 more. 

Even those with low energy usage will have to pay £90 extra under the new price cap, whereas those with higher usage will see bills rise by £202.

Price hike: A family on a default deal living in a four-bed detached house will can expect their combined gas and electricity bills to increase from £1,840 to £2,078 from October

Price hike: A family on a default deal living in a four-bed detached house will can expect their combined gas and electricity bills to increase from £1,840 to £2,078 from October

Cheapest deals online only

Nine of the top ten cheapest energy deals are available only to those with an internet account, according to energyhelpline.

And the only top 10 tariff available to those who are not online is £50 a year more expensive than the offer that costs least.

Utility Warehouse’s Double Gold variable tariff is £1,081 a year, based on average usage, and you don’t have to be online. 

However, you must agree to have all your utilities provided by it and sign up to the supplier’s Gold Bundle, which also includes broadband, mobile and landline.

The two cheapest online-only deals are Ebico Living’s Standard April 2021 tariff and Utility Point’s Just Join Up, which cost £1,032 and £1,036 each year respectively – a saving of more than £240 compared to the new price cap for those who switch.

Tashema Jackson, from the comparison site energyhelpline.com, says: ‘Increasingly, the best deal to be found on a whole range of products and services is by shopping online and energy is no different.

‘However, for those who aren’t connected to the internet or who aren’t quite as internet-savvy, it can seem as if they are being left behind when it comes to finding the cheapest prices.’

She adds that those not online can call their existing supplier to ask to be put on their cheapest deal, or ring the call centre number of some of the biggest comparison sites for help in finding a better- value provider.

Daft meters: Smart meters, which monitor your energy usage in real time and send meter readings automatically, have been plagued with problems since their rollout in 2016

Daft meters: Smart meters, which monitor your energy usage in real time and send meter readings automatically, have been plagued with problems since their rollout in 2016

Postcode lottery

Hundreds of thousands of households will also be penalised because of where they live.

The charges are then passed to customers and the differences can be extreme.

Data from Octopus Energy suggests those living in South-West England will be charged the highest annual energy bills of £1,318 for electricity and gas once the new price cap is introduced. 

This is £70 more than families in the East Midlands, who will pay £1,248 a year for their energy from October — the lowest prices in the UK.

Merseyside and North and South Wales also pay over the odds for energy and can expect annual bills to increase to £1,306 and £1,300 later this year.

At the other end of the scale, households in Yorkshire and the North-East of England will pay £1,253 and £1,252 a year respectively. 

The annual bill for those in northern Scotland will be £1,279, whereas those in southern Scotland will pay £1,253.

How much you pay depends on a number of factors. These include how much energy firms sell in your area, how much power is generated locally and what the local distribution network, which supplies energy from the grid, charges providers for the service.

For example, some areas can get their energy supply a little cheaper than others because they have a more abundant supply of fossil fuels or renewable energy.

Smart meter warning

You may find that your energy provider will offer you a cheaper tariff if you agree to have a smart meter installed.

The devices, which monitor your energy usage and send meter readings, have been plagued with problems since 2016, many people complaining of glitches and faults when they switched provider.

The second generation meters, Smets2 devices, were meant to rectify this, however, many suppliers are still not installing these and continue to use original models. The rollout has also been slowed by the lockdowns.

a.murray@dailymail.co.uk

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