Promised savings wiped out after just three months as Ofgem increases price cap by £117 per year

• Standard meter default tariff price cap increases by 10% on average, adding £1.3 billion to UK energy bills

• Prepayment meter cap also increases by £106 per year, adding a further £420 million to bills

• Increases effective from 1 April, hitting 11 million households on standard meter default tariffs and 4 million on prepayment meters

• Cheapest deal available today is £286 less than new cap.

Richard Neudegg, Head of Regulation at Uswitch.com, said: “People could be forgiven for feeling that they’ve been completely and utterly conned by the Government’s energy price cap. Ofgem proudly proclaimed that the cap would cut bills by an average of £76 a year when it came into force at the beginning of January – but just weeks later, it’s announcing a jaw-dropping increase. It’s now crystal clear that households were never going to save what was promised.

“We are in a ridiculous situation where standard plans are likely to be in higher in April than before the cap was introduced. With bills set to soar by an average of £117 for 11 million homes, Britain needs to brace itself for a billion pound price hike.

“Energy suppliers have traditionally been the ones blasted for blaming price rises on wholesale costs. Now, shamefully, Ofgem is doing the same thing, as the reality of energy prices catches up with the political hype.

“With the cap being reviewed every six months, those remaining on default tariffs should be prepared for the possibility of a state-sanctioned shock to household budgets twice a year.

“With the cheapest deal available today £286 less than the new cap, households on default energy tariffs have a very clear choice: carry on paying unnecessarily high prices that can frequently change at the mercy of a spreadsheet, or beat the price cap and cut your bills by switching to a fixed deal.”

Find out how you could save over £1,000 a year with Uswitch here.