About 2.5 million more people have been plunged into “fuel stress”, experts have warned. Overall five million people will be forced to spend a tenth of their incomes on energy bills as a result, the Resolution Foundation think tank said.
Households are unable to avoid the rises, as even the cheapest fixed-term contracts now cost a third more than the price cap. The average fixed deal now costs £3,173 a year, according to Uswitch, the price comparison website. This is a record high and has jumped by £833 since January. It is £1,202, or around £100 a month, more than the April price cap for variable tariffs. This means the average fixed-rate tariff is 60pc higher than the price cap.
The cheapest deal, a two-year fix from Ovo Energy, costs £2,650 – 34pc more. Meanwhile, some energy firms are offering fixed deals costing up to £4,200.
There is further pain ahead for households on Wednesday when council tax and National Insurance rises take effect. Council tax for average band D homes will rise by 3.5pc to £2,000 for the first time, while National Insurance rates will increase by 1.25 percentage points.
State help in the form of council tax rebates will be effectively halved by the increased levies charged by local authorities for close to a third of homes. A rise to National Insurance thresholds to £12,570 in July will only benefit those earning less than £40,000 a year; everyone else will still pay more.
Already at 6.2pc, the highest level of inflation for 30 years is also pushing up the prices of everyday goods. No one is immune, with younger, single people forecast to be hit with a £1,800 rise in costs compared to pre-pandemic levels, while retirees face paying around £2,400 more than two years ago, according to Telegraph analysis, which has tracked the cost of accommodation, fuel, food, clothes, energy, recreation and tax over the past 24 months, factoring in the price rises that are now starting to bite.
It is expected to spark the greatest fall in living standards on record, as wages fail to keep pace. Levels are not forecast to recover for at least three years, according to the official forecaster the Office for Budget Responsibility.
Energy bills are expected to jump again in October to as much as £2,500 a year, when the energy price cap is increased for a second time this year. Energy websites crashed yesterday as vast numbers rushed to submit meter readings to ensure every kilowatt they had used up to the end of March was charged at lower rates, before price rises kicked in this morning.
How the cost of living crisis will affect you
By Ben Butcher
The Telegraph has been tracking the cost of living crisis on four very different households using live data stretching back two years looking at inflation and mortgage rates, fuel prices and more.
It has revealed how the crunch will hit four different household types.
Young and single
Jack is in his mid-to-late twenties and lives alone in a rented studio apartment. He earns £30,000 a year at a job he currently drives to.
Commuting by car will represent one of his biggest challenges in April with fuel prices persistently high.
The average commuter drives 7,400 miles a year and with petrol at a record high, he will be paying £40 extra a month if prices stay this high.
This means around 6.3pc of his post-tax income is spent on fuel, compared to 4.3pc in April 2020. Our wealthiest household, in comparison, will spend just 2pc with prices this high – despite driving the same distance.