Will British Gas price hike drive consumers into deeper debt?

British Gas has announced that it will be raising prices this August, which could result in households already struggling to pay for the high cost of living driven into deeper debt.

According to uSwitch, the carrier has stated it will put costs up by an average of 18 per cent for gas and 16 per cent for electricity from the 18th of next month, which could mean typical bills for a dual fuel customer will increase from £1,096 to £1,288.

The organisation last increased its charges in December by 6.9 per cent or £43 for gas and 6.7 per cent or £28 for power.

Within the space of one year, customers will have had to bear the brunt of a £258 price hike on their bills – which is larger than the 21 per cent increase seen by those who receive their electricity from ScottishPower.

British Gas is the UK's biggest supplier and the action taken by the company today could see the remaining four biggest suppliers follow in its footsteps.

Director of consumer policy at uSwitch Ann Robinson said: "The impact on family budgets will be huge, but it will be particularly hard on those living on fixed incomes and I would urge both suppliers and the government to start thinking now of how they can provide some support."

This follows news that nearly a quarter of British households are already in debt due to the price of gas and electricity, with uSwitch revealing 6.3 million UK families are in fuel poverty.

By James Francis