It marks a 6.4% increase to the energy price cap and represents a higher hike than the £85 rise previously forecast.
The total gas and electricity bill for homes in the UK will be £1,849 per year for typical dual-fuel customers, which equates to an extra £9.25 per month between 1 April and 30 June.
Following a third quarterly cap in April, prices will be £159 higher than at the same point in 2024.
A recent spike in wholesale prices was the “main driver” of the increase, according to Ofgem, which also said four million customers had moved to a fixed tariff since November.
There are 11 million energy customers who have moved to a fixed deal and will not see the same increases as those on a price-capped tariff.
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The cap set by Ofgem determines the maximum rate per unit and standing charge that energy firms can charge households.
Customers have been urged to switch from price-capped tariffs so they are protected from future price hikes. Price comparison site Uswitch warned customers earlier in February that the high demand for gas and electricity would see the energy price cap surge too.
Around 26 million people are on a price-capped tariff in the UK.
While some homes will see their standing charge reduce, there will be variation depending on where you live, the regulator warned.
Other households could see their standing charge increase by £20 per year because of hikes in what it costs to transport energy around the country.
‘Huge challenge for many households’
Jonathan Brearley, CEO of Ofgem, said: “We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households.
“But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, homegrown system.
“Energy debts that began during the energy crisis have reached record levels and, without intervention, will continue to grow. This puts families under huge stress and increases costs for all customers. We’re developing plans that could give households with unmanageable debt the clean slate they need to move forward.”
Nearly seven million households in the UK are in debt to their energy supplier and a total of eight million are finding it difficult to afford energy bills, research from Citizens Advice shows.
‘There is a way of paying for this’
Clare Moriarty, chief executive of Citizens Advice, said: “We’re particularly concerned about households with children, where over one in three struggle to afford bills, rising to more than half of those on low incomes.”
Moriarty added: “The Government can’t let another winter go by without targeted support for those most in need, and there is a way of paying for this.
“Our recent analysis found energy network companies made billions in excess profits while households have faced soaring bills, and it’s only right this money be used to help fund better-targeted bill support and much-needed debt relief.”
To help families, the Government announced it is proposing an expansion to the Warm Home Discount scheme, so up to three million more households could receive £150 towards their energy bills next winter.
With household debt to energy suppliers reaching £3.8bn, Ofgem also said it will extend the debt allowance initiative so families are allowed to keep gas and electricity in their homes as they get on top of their outstanding energy bills.
If you are struggling to pay your bill, you can contact your energy supplier to arrange a payment plan. For customer advice, you can also contact Citizens Advice consumer service on 0808 223 1133 (0808 223 1144 for Welsh language speakers).
