Warning over energy price hikes

Further energy price hikes will throw households' already stretched budgets into "turmoil", consumer groups warned.

They have urged people to take action to keep their bills down, although some of the cheapest deals on the market have already disappeared.

Many households have already been squeezed by increased mortgage costs after a string of lenders increased their standard variable rates (SVRs) in recent months, affecting more than a million home owners.

Santander's hike to its SVR last week meant a few hundred thousand of its customers saw an average increase of £26 a month for a £100,000 mortgage. Food prices have also been predicted to rise following poor harvests due to the wet British weather as well as the worst drought in 50 years in the US and a heatwave in Russia.

Recent research from consumer website MoneySupermarket found that a third of adults believe a £50 rise in their monthly outgoings would push them to financial breaking point.

Citizens Advice chief executive Gillian Guy said: "Many British Gas customers will find the possibility of a price rise really frightening. Bill increases throw already stretched budgets into turmoil - with people forced to find more ways to scrimp and save. But there are things that people can do to save money on their fuel bills."

Citizens Advice is running a Big Energy Saving Week from October 22 to 27, when it will help consumers find ways to cut their fuel bills.

Consumer experts have said people currently on a standard tariff should be looking into a cheap fixed tariff, which could save them more than £200 a year. Some fixed-rate tariffs also guarantee no price hikes for two winters.

Scott Byrom, energy expert at MoneySupermarket, said that market-leading fixed-rate deals from Scottish Power and EDF Energy were removed around the time that SSE announced its price hikes in August, as people moved to snap them up. But he said that some smaller brands such as Ovo Energy are still offering some competitive deals.

Mr Byrom suggested customers who hunt for better deals may find that some energy companies introduce a few more competitive products to try and tempt customers away from British Gas, but they will need to be proactive and keep a close eye on the market. He said: "Overall, the message is to do something. Get off a standard tariff."