Scottish Power is hiking its gas and electricity prices by 3.7% affecting 900,000 customers on its standard variable tariff (SVT) from 8 October.
It is the second price increase from the energy supplier in just four months following a 5.5% rise in June, meaning the average dual fuel consumer bill will rise by £106 this year.
Customers have already had to absorb a £63 increase earlier in the summer which has now been compounded by the additional £46 charge.
The company says the increase is due to climbing wholesale energy costs since April, but will only impact a third of customers.
Those affected will be offered the chance to move onto a fixed price tariff to avoid the hike says Neil Clitheroe, chief executive of retail at Scottish Power.
It is the tenth price rise by the six biggest UK energy firms this year including British Gas and EDF.
The change means Scottish Power’s standard tariff will be £404 higher than the current cheapest deal on the market and customers will see their annual bills rise to £1,257 – the equivalent of £41 million nationwide.
Victoria Arrington, of Energyhelpline says consumers have been hit with a “tsunami of price hikes” this year and this latest one from Scottish Power is a “bitter pill to swallow”.
"These double price hikes are starting to feel particularly harsh, especially as autumn and winter approaches. The cost of sticking to a big-name energy supplier is quickly outstripping the feeling of safety it gives customers,” she adds.
Government weighs in
The government has expressed its disappointment with Scottish Power's decision. A spokesperson from the Department for Business, Energy and Industrial Strategy (BEIS) says: “It is disappointing that Scottish Power has announced another price rise in its default tariff at a time customers are already paying more than they need to.
“This is why the government is introducing a new price cap by this winter to guarantee that consumers are protected from poor value tariffs and further bring down the £1.4 billion a year that customers have been overpaying.”
However Emma Bush, uSwitch energy expert, urges customers to take action and switch to a cheaper supplier and says the government cap won't protect them from rises.
“It’s vital that consumers don’t mistakenly think that a Government cap will protect them. As Ofgem’s two increases to the prepayment cap have shown, prices can still rise when a cap is in place," she says.
“Customers don’t need to take this news on the chin. Instead of being sitting ducks on standard variable tariffs, they can show their supplier who is boss by switching away and saving up to £482.”
Big Six price hikes announced this year to date:
- 19 April - E.on: up to 4.2%, average annual bill to increase by up to £50.
- 29 May - British Gas: 5.5%, average annual bill to increase by £60.
- 1 June - Scottish Power: 5.5%, average annual bill to increase by £63.
- 7 June - EDF: up to 2.7%, average annual bill to increase by up to £28.
- 17 June - Npower: 5.3%, average annual bill to increase by £64.
- 11 July - SSE: 6.7%, average annual bill to increase by £76.
- 16 August - E.on: up to 4.8%, average annual bill to increase by up to £55.
- 31 August - EDF: up to 6%, average bill to increase by up to £70.
- 8 October - ScottishPower: up to 3.7%, average bill to increase by £46.