Consumers are facing a winter of “increased misery and huge anxiety” after Ofgem announced it will change how often the energy price cap is updated.
Warning that customers face a “very challenging winter ahead”, the regulator said the cap would now be updated every three months rather than six.
It said the change would go “some way to provide the stability needed in the energy market” during the cost of living crisis.
It said the Ukraine crisis had created volatility in the global energy market and led to “much higher prices for both gas and electricity than ever before”.
But campaigners have said the price cap move “wasn’t necessary” and would mean further price rises in January – when energy costs are typically at their highest – were now “inevitable”.
Peter Smith, the director of policy and advocacy at National Energy Action (NEA), warned: “January is also usually a time of increased mental health problems and further hikes in bills will sadly lead to increased misery and huge anxiety for energy consumers across Great Britain, particularly for the poorest households.
“It's disappointing that Ofgem has not listened to these concerns. They could have used their discretion to offset this avoidable outcome by starting the reforms in April when energy demand starts to fall.”
Ofgem warned that as a result of the market conditions, the price cap would have to increase to reflect increased costs.
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However, it said that the changes would mean that any fall in wholesale prices would be passed on to customers quicker with the quarterly price cap.
Ofgem chief executive Jonathan Brearley said: “The trade-offs we need to make on behalf of consumers are extremely difficult and there are simply no easy answers right now.”
Labour MP Darren Jones, chairman of parliament's business, energy and industrial strategy committee, said that while bills will now go up more frequently, the increases "won't be as big as before".
Gillian Cooper, head of energy policy at Citizens Advice, added: “Ofgem must make sure suppliers are helping customers who are struggling to pay.
"It should hold energy companies to account so people aren’t chased by debt collectors or pushed onto prepayment meters when they can’t keep up with bills.”
Changes to the price cap come as household energy bills are likely to remain at more than two-and-a-half times higher than they were before the current crisis – until at least 2024, according to latest predictions.
Energy consultant Cornwall Insight said bills will hit a massive £3,359 per year from October for the average household, and will not fall below that level until at least the end of next year.
The price cap on energy bills, which regulates what 24 million British households pay, will hit £3,616 from January and rise again to £3,729 from April, it said.
It will begin to slowly fall after that, reaching £3,569 from July before hitting £3,470 for the last three months of 2023.
In May, the government announced an energy costs support package – worth £400 per household – in response to predictions that bills would rise to £2,800 for the average household in October.
The package also promised extra support for more vulnerable households.
But financial expert Martin Lewis recently warned the country is on the brink of a “national financial cataclysm” due to soaring energy bills.
The Money Saving Expert founder said the £400 government grant had already been swallowed up by predicted price increases and warned that the rises "are unaffordable for many on the lowest incomes".
He said: “The winter is going to be bleak. I believe unless action is taken we are facing a potential national financial cataclysm...
“And while tax cuts will help, for those at the bottom end of universal credit and many state pensioners, the rises – when added to the increasing costs of food and transport and other inflation – means they’ll be back to that choice between starving and freezing.”