Household energy bills will rise again in January, as the price cap is hiked by a further 1.2%.

Regulator OFGEM said the increase would see the typical bill for a household in England, Scotland and Wales increasing from £1,717 to £1,738-a-year, or by around £1.75-a-month.

It follows the price rising by 10% in October.

Tim Jarvis, director general of markets at OFGEM, said: “While today’s change means the cap has remained relatively stable, we understand that the cost of energy remains a challenge for too many households.

"However, with more tariffs coming into the market, there are ways for customers to bring their bill down so please shop around and look at all the options.

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“Our reliance on volatile international markets – which are affected by factors such as events in Russia and the Middle East – means the cost of energy will continue to fluctuate. So it’s more important than ever to stay focused on building a renewable, home-grown energy system to bring costs down and give households stability.

“In the short-term though, anyone struggling with bills should speak to their supplier to make sure they’re getting the help they need and look around to make sure they’re on the best, most affordable deal for them.”

The move comes after the Labour government opted to begin means testing the winter fuel payment for pensioners, restricting it only to those on pension credit or other means tested benefits.

National Energy Action estimates that around 20% of households in the UK, close to six million, are already in fuel poverty.

(Image: PA)

In Scotland that is defined as households which have to spend 10% or more of their income to maintain satisfactory heating and have a remaining income 90% or below the UK minimum income standards.

In 2022, 31% of households met that definition, with 18.5% in extreme fuel poverty, which is when a household has to spend 20% or more of its adjusted net income on heating - 89% of households with an annual income less than £15,000 were in fuel poverty.

A YouGov poll conducted for the children's charity Barnardos earlier this year revealed that 33% of parents had cut back to save money on energy bills.

Derek Mitchell, CEO at Citizens Advice Scotland, said: “The reality is that any increase in energy costs is bad news.

“Energy prices remain too high and force people into impossible situations. It limits choices when it comes to bills and household spending, often leading to people rationing or stopping the use of heating completely.  

“As the days get colder and darker, especially over the past week, thousands across Scotland face the misery of living in a cold home, impacting both their physical and mental wellbeing.

“Across our network, the average person seeking debt advice has £2,500 of energy-related debt with many on low incomes. And unfortunately, our energy markets are broken. Urgent and targeted solutions including a social tariff and debt write off schemes are needed to help people not only stay warm but have a realistic way to pay debts back."

Scottish Greens spokesperson for social security and equality, Maggie Chapman said: "This increase will further punish people and families all across the UK. 

“The Labour Party should be utterly ashamed of their decision to cut Winter Fuel Payments and to force thousands of pensioners way beyond having to choose between heating their home and eating.

“With bills soaring and temperatures plummeting, this cut is becoming more callous with every passing day. People will die because of it.

“The support that the UK offers to pensioners is already far too low, and so many are having their budgets stretched by rising living costs. 

“Means testing is wrong. It creates stigma. It creates cracks for people to fall through, while fuelling division with questions about who is worthy of receiving services and who is not.

“A lot of pensioners already living in fuel poverty are no longer eligible for this benefit because they are only a few pounds over the threshold. 

“We all have the right to a warm home, but Sir Keir Starmer is taking it away from people all over our country. It is time for him to admit he was wrong, reverse this disastrous move and protect people through a long, cold winter.”