Cost of living budget calculator – how much your bills will rise by as prices skyrocket

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Millions of households will experience eye-watering hikes in their energy bills from April 1 as the price cap is set to increase. The move will affect some 22 million households

Millions of households will see energy bills increase by almost £700 from April, Ofgem has confirmed – and now you can see how much you can expect to pay.

The energy price cap – the maximum amount Ofgem says firms can charge customers on variable tariffs – has increased, in part because of the pandemic.

As a result, people on default tariffs paying by direct debit will experience an eye-watering 54% rise, as it jumps from £1,277 to £1,971 from April 1.

Prepayment customers will be worst hit, with an increase of £708 from £1,309 to £2,017.

The move will affect some 22 million households and follows a 12% rise in October .

See how much your bills will be using our Cost of Living Calculator

Ofgem chief executive Jonathan Brearley said: “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.

“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices – a once in a 30-year event – and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.

“Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.”

An announcement on the energy price cap had been due next week but was brought forward to today.

The price cap sets a limit on the rates a supplier can charge for each unit of gas and electricity you use and is reviewed twice a year.

Gas prices around the world have climbed, owing to the pandemic.

As a result of the prices of wholesale gas – which have quadrupled in the last year – suppliers are now passing on the cost to customers.

Several readers have shared their stories on how the new prices will affect them.

Ofgem reviews its energy price cap twice a year. The next time it could change is in October, although this might be altered.

While wholesale prices have eased, experts say October could bring another rise in the price cap, possibly to an average £2,300 a year.

To ‘take the sting’ out of the announcement, Rishi Sunak announced a one-off repayable £200 discount and a rebate on council tax bills.