The Household People are now facing an era where energy costs have risen to unprecedented levels and their monthly bills will quadruple in the next 24 hours.

Since wholesale costs soared to an all-time high of record levels, plunged the market in chaos, it has been 3 months. A total of 29 firms have collapsed in the past year — that’s a third of the market. Energyhelpline’s analysts also predict six more will go bust in the coming month.

This crisis has affected four million customers, and we all are now on the hook for multi-billion-pound bills. The chaos is not over. Billpayers report huge and sudden payment requests.

Households hit: The energy crisis has hit four million customers and left customers on the hook for a multi-billion pound bill

Hit by the energy crisis: Four million households are affected and customers end up paying a multibillion-pound bill

Money Mail this week discovered bills will be pushed up to cover a £155 million payout to energy giant E.on, after the supplier took on customers of four bust firms. It is claiming £625 for every new customer it has picked up, adding £6 to the average family’s annual bill.

Experts warn we could end up covering a £2.5 billion charge for similar payouts to other companies — adding around £100 to the average bill.

Jonathan Brearley, chief executive of energy regulator Ofgem, last night admitted Britain’s retail energy market was not ‘resilient enough’. The regulator will announce today a number of new measures designed to help suppliers survive a crisis.

Writer Jen Hyatt could not believe it when her 19-year-old daughter’s monthly bill increased more than four-fold, from £41 to £183. 

When she challenged it, SSE admitted Kate, who lives in a small two-bed flat in Dundee with a flatmate, had only used £37 of power the previous month.

Jen, 62, says: ‘SSE told me it needed to ensure it was covered in case wholesale energy prices increase — which is why Kate’s bill rose so much. 

“But, this is insane. Why should anyone pay more for energy they are not using because a supplier is hedging its bets?’

Firm insists that the updated bill is correct, and claims the initial cost was determined by an estimate.

Experts at Citizens Advice warned last week that the average energy bill could soar by another £614 next year — and this is just an average figure. Higher bills could be faced by families who live in bigger homes or those who have low-cost deals that are ending soon.

With no competitive fixed deals left, households are in the unprecedented position where standard variable tariffs protected by the price cap are now their most affordable option

The price cap protects standard variable tariffs, making them the most cost-effective option for households. There is no competition in fixed rates.

The price cap protects standard variable tariffs, making them the most cost-effective option for households. There are no more competitive fixed rates. But these still cost an average of £1,277 a year compared with around £900 for the best fixed deals a year ago.

And analysts predict the cap for the average household could rise as high as £1,891 in April.

However, many customers such as Kate feel the pinch already with their bills increasing in number by up to four times or five times over recent weeks. 

After their company went bankrupt, some have switched to a better deal with another supplier. Others say their provider has simply increased their monthly direct debits — even when they are in credit — without explaining why.

Many have had to reduce or turn off their heating due to rising living costs and an inflation rate of 5 percent. Money Mail received complaints from family members that their heating is not working properly and they stopped using tumble dryers or dishwashers.

Ash Scott (36), claims that her energy bills doubled in the past year. Between October and December, she paid E.on £394 compared with £196 over the same period in 2020. 

She now works remotely from North Sheen in South-West London and attempts to turn off the lights as often as possible.

E.on says Ash’s payments haven’t covered the amount of energy she uses, which is why it has had to increase the charges.

Citizens Advice lashed out at the Energy Regulator last week for not enforcing stricter standards for unfit suppliers over nearly a decade. This left the market open to attack. 

The charity accused Ofgem of allowing financially unstable firms to be run out of owners’ kitchens and living rooms. However, Ofgem reduced its enforcement staff size by 25% in spite of concerns.

Safeguard: Analysts predict the energy price cap could rise to as high as £1,891 in April for the average household

Safeguard: Analysts predict the energy price cap could rise to as high as £1,891 in April for the average household

The charity added that suppliers have held on to £1.4 billion of customer credit, with some households owed more than £1,000. Yet the average billpayer only needs £150 of surplus credit to cover typical winter usage, it said.

Louise Graham was charged four-times more than her normal bill after her energy company went bankrupt. Bulb she signed her up for in July, when she relocated to East Sussex to live in a 2-bed apartment.

Louise, who lives alone, was paying around £57 a month. But after the supplier, which has 1.7 million customers, was put into special administration in November, she received a bill for £260, which it claimed covered her usage for the previous six weeks.

Louise, 37, says: ‘If the bill was reasonable we might trust it, but this seems too expensive even for a family, and I live alone.’

Bulb suggests that Bulb is assuming the cause of the sudden increase in temperature was Louise using electric heaters. They are very expensive and can be quite costly over winter. Bulb also believes it could have been due to an issue with Louise’s older electricity meter. Bulb removed the old meter in October.

Ofgem states it is accepting that the energy market must be reformated quickly as it wasn’t designed to handle such extreme market events.

Experts predict that bills will remain high at the moment for the next twelve months or longer.

Tashema Jackson, from Energyhelpline, says: ‘Wholesale energy prices are sky-high at the moment, and for the past four months the price cap has kept most of those costs from being passed on to households.

‘However, we are entering a period of high prices, with bills likely to be twice as high as they were a year ago come April next year.’

Business owner Jo Smith, 46, says the rising cost of energy is eating into her family’s savings.

Jo and her partner Julian, 51, paid Scottish Power £309 a month for gas and electricity on their fixed deal which ended in April. They moved on to a standard variable tariff and saw their bill increase to £381 in September, before soaring to £478 in November.

To cut costs, the couple, who live with Jo’s daughter Jess, 17, have stopped using the tumble drier and no longer run the heating in the day. To keep the heat in, they are careful to turn off lights and close doors.

Jo is a Sutton Coldfield resident who owns a company that specializes in branding and business development. Jo says she has terrible feelings when her assistant asks to wear a jumper, rather than heat the house.

She adds: ‘These extra costs have really put a strain on my family. Julian is having to eat into his savings to cover the bills.’

Scottish Power says the increase in Jo’s bill reflects both changes in her standard variable tariff, which rose in line with the price cap, as well as her usage. The firm is expected to contact Jo.

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