Energy bills could exceed £4,000 a year

According to new research by Uswitch.com, household energy bills could rise by almost £550 a year in order to fund a range of investments including `renewable energy sources and the roll-out of smart meters`, The Times reports. By 2020, annual bills could reach £4,733.

Ofgem, which released details of its five-year settlement with energy companies yesterday, said that British households would see an average rise of £4.30 a year in their electricity bills. However, figures from Uswitch.com show that the whole investment programme may actually add £548 a year onto consumer energy bills.

A debt management expert for Gregory Pennington commented: "If energy bills do increase as expected, we may see more people struggling with debt and possibly ending up in fuel poverty - which is when a household is spending at least 10% of their total income on their energy bills.

"To `safeguard` themselves against the predicted rises, homeowners should think about ways they can improve the energy efficiency of their home - for example, by investing in cavity-wall insulation or double glazing.

"Making investments like these could help to reduce the cost of energy bills, which should help homeowners stay out of debt."

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