More than 2.5 million households have been warned they could be hit by a £116 energy bill rise this month.

Households on some tariffs will see a rise in January, with Economy 7 tariffs increasing by 7.6 per cent already in 2023.

Companies who supply those tariffs can set their own rates and were allowed to increase them on January 1 when the new Ofgem price cap was introduced.

Research from the BBC found that customers on that tariff were now paying 46% more on average than others on electricity-only tariffs.

Barrhead News:

An Economy 7 tariff measures your electricity usage based on two different prices per kilowatt; an on-peak rate and an off-peak one.

The off-peak rate applies for seven hours of the night - which is where the '7' in the name comes from - and the on-peak price applies to the other 17 hours of the day.

Energy regulator Ofgem said: “Electricity use is higher in winter for people with electric heating systems designed to use peak- and off-peak meters. This will balance out across the rest of 2023 so average bills are less than people on other meters.

"The bottom line is if Economy 7 customers use cheaper off-peak electricity for night-storage heaters, they can make substantial savings. They will pay more if they use more peak-time electricity.

“Customers have the power to switch to a new deal if it will cut their costs are rising because they don’t use electricity at night.

"Our licence requires suppliers to give customers information about the cheapest Economy 7 tariff or cheapest tariff on other meters.”