Future household energy bill debts

Increasing household bills will hit consumers in the pocket to the tune of approximtely £2.6bn this year. This is equivalent to nearly a penny on income tax, new research shows.

Analysts at consultants Capital Economics say inflation busting increases in gas, electricity, water and council tax bills will threaten the recovery in consumer spending and they warn that fresh increases in oil or wholesale gas prices could see domestic utility bills rising yet again.

Powergen unveiled a record 24.4% increase in the price of gas, and said it was also raising electricity bills by 18.4% from 10 March. This is in addition to increases from British Gas, EDF Energy and Scottish Power, averaging-20% for gas and 13.9% for electricity. The water watchdog, Ofwat, has warned the average water and sewerage bill will rise by £15, or 5.5%, at the start of April.