Energy bills could rise by £400 for millions of households due to volatile gas prices and suppliers collapsing

People in the UK could see their energy bills rise by hundreds of pounds next year, analysts have said.

Research agency Cornwall Insight has predicted that the energy price cap will soar by £400 in the spring.

The firm said that a further rise in gas prices and the potential collapse of more suppliers could push the energy price cap to about £1,660 in summer.

This forecast is approximately 30% higher than the £1,277 price cap set for winter 2021-22, which began at the start of October.

Craig Lowrey, senior consultant at Cornwall Insight, said: “With wholesale gas and electricity prices continuing to reach new records, successive supplier exits during September 2021 and a new level for the default tariff cap (£1,277 for a typical dual fuel direct debit customer) for Winter 2021-22, the GB energy market remains on edge for fresh volatility and further consolidation.”

In a statement to the BBC, energy regulator Ofgem - which reviews the price cap once every six months and changes it based on the cost that suppliers have to pay for their energy, cost of policies and operating costs - said it was a “worrying time for many people”.

The regulator added: “The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter.

“However if global gas prices remain high, then when we update the price cap unfortunately the level would increase.

“Any customer worried about paying their energy bill should contact their supplier to access the range of support available.”

A message from the editor:

Thank you for reading. NationalWorld is a new national news brand, produced by a team of journalists, editors, video producers and designers who live and work across the UK. Find out more about who’s who in the team, and our editorial values. We want to start a community among our readers, so please follow us on Facebook, Twitter and Instagram, and keep the conversation going.