British Gas to hike electricity prices by 12.5%

The giant had implemented a price freeze until 1 August and so did not increase prices during the round of hikes conducted by the other five of the big six energy firms earlier this year. Therefore a rise in the coming weeks was expected.

It admits 3.1 million of its customers, including those with Sainsbury's Energy, will be hit by the jump from Friday 15 September, though gas prices are staying the same. Naturally, anyone on a fixed-rate tariff will not be affected by the rise till the end of their term.

However, British Gas says more than 200,000 vulnerable customers will automatically receive a £76 credit to protect them from the rise - these will be classed as those receiving the Warm Home Discount.

Hit by the hike? Don't just put up with it. Find the cheapest deal with our free Cheap Energy Club.

Martin: 'Do not sit on your backside and just take this'

Martin Lewis, Cheap Energy Club founder, said: "This is British Gas's catch-up price hike. It was the only one of the big six firms not to raise prices at the start of the year, and now, as predicted, it'll do it from September. And that means if, as is possible, we see another batch of rises this coming winter, its customers will feel like they've been price-slapped twice in rapid succession."While this freeze has given people a little respite from price moves over the key high-use winter period, the problem is, for many the false sense of security that it wouldn't move prices meant they did nothing, when they could've cut their rate and locked that in for longer by actively picking a far cheaper one-year fixed energy tariff.

"So let this be a clarion call for British Gas customers (and all those on big six standard tariffs) – do not sit on your backside and just take this. For someone with typical use, on British Gas's standard tariff, you're going to be paying £1,120 a year from September. The cheapest tariffs on the market are £844 for the same usage. And switching is usually no big deal - there's no break in service, no engineers coming to call – it’s the same gas, same electricity, same safety – only the price and who provides customer service actually change."

What does British Gas say?

British Gas says the 12.5% electricity price hike "reflects the increasing costs of energy policy, and delivery to customers' homes since 2014". It adds that in that time, overall electricity costs have increased by 16%.

Chief executive Mark Hodges said:  "We are fully engaged in the debate over how to ensure the energy market works better for customers and have made a number of proposals to the Government and [regulator] Ofgem.

"These include phasing out the standard variable tariff and levelling the playing field so all suppliers pay a share of energy policy obligations [under the Government's Energy Company Obligation scheme, energy suppliers with more than 250,000 customers have to provide support to help improve energy efficiency, reduce emissions and help fuel poverty].

"We also welcome and share Ofgem's focus on vulnerable customers. That is why we have decided to give a special credit this winter to the most vulnerable British Gas customers, protecting them from the impact of this price increase."

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