The rise will be implemented as of the 23 November 2013 and represents an increase of 8.4% for gas and 10.4% for electricity.
The energy supplier has blamed the global energy market, costs associated with the national grid and green subsidies for the increase. Each of the latter was also singled out by SSE, which increased its prices last week.
The remaining big six energy companies – E.ON, EDF, npower and Scottish Power – are expected to raise their prices in the run up to winter.
Customers looking to avoid a price hike are advised to consider switching to a fixed price energy plan. These plans enable consumers to lock their energy prices for close to four years, shielding them from subsequent price rises.
‘Today’s price hike will be seen by many as a broken promise’
Tom Lyon, energy expert at uSwitch, said: “Today’s price hike will be seen by many as a broken promise after the supplier suggested in May that it would use the extra profits it made last winter to hold off from any price hikes. British Gas customers have had the rug pulled from under their feet and I suspect that many will be feeling let down and betrayed. Adding a further £125 to an already sky-high energy bill will leave many buckling, but the real damage will be to trust.
“Now that Britain’s two biggest suppliers have announced there is nothing to stop the others from following suit. The question now is whether it will be a trickle or a stampede. However, the fact is that households will be struggling to afford to keep warm this winter.
“If you want to protect yourself then the time for action is now. There are some great fixed price deals on the market which can protect you from price hikes for anything up to four winters. This protection could be extremely valuable for those on a tight budget and could make all the difference in being able to afford to keep warm. As well as reducing the cost of your energy, now is also the time to reduce the amount you use – not by going cold, but by making your home as energy efficient as possible.”
‘Difficult times for many customers’
Ian Peters, managing director of British Gas Residential Energy, said: “I know these are difficult times for many customers and totally understand the frustration that so many household costs keep on rising when incomes aren’t keeping pace. We haven’t taken this decision lightly, but what’s pushing up energy prices at the moment are costs that are not all directly under our control, such as the global price of energy, charges that we have to pay for using the national grid that delivers energy to the home, and the cost of the Government’s social and environmental programmes.
“Energy efficiency is the best way to keep bills down, and I encourage anyone who has not benefited from them to go online and check if they are eligible. On average, insulation can save you around £200 a year.
“A price rise doesn’t necessarily mean energy bills have to go up too. The amount you pay depends not just on the price, but on how much gas and electricity you use. Energy efficiency is making a real difference. We’ve already provided three million customers with insulation, help and advice in managing their bills and keeping their homes warmer for less.”