At the same time, the company announced an £8m package of measures designed to help customers limit bills. This includes free cavity wall insulation for customers over 60 and those on income or disability benefits and free advice to ensure people are claiming Government benefits entitled to them.

Nick Horler, managing director of Powergen Retail, said: 'This price rise is not a step we've taken lightly. All suppliers are currently affected by rising wholesale costs and we've delayed this increase for our customers longer than most of our competitors.

We offer a range of value-adding products and services, and are committed to remaining highly competitive on price, with the average customer still being better off with Powergen than with British Gas.'

Last month, British Gas raised the price of gas by 12.4% for 12m customers, and 9.4% for 6m electricity customers, while EDF Energy raised the average cost of electricity and gas 3.8% and 3.5%, respectively. Scottish Power increased gas and electricity prices by 11.8% and 9%, respectively.

A new study published today by marketing firm JD Power and Associates found the average monthly gas bill, across all suppliers, has increased for the first time since the domestic market was opened to full competition to £29.78 - a rise of 9%. Spending on electricity has also risen for the first time since 2000 - up 7% to a monthly average of £31.58.

The study also looks at consumer satisfaction levels with gas and electricity suppliers. The analysis identifies a drop in both areas, with a drop of 32 points over the year on gas and a drop of 33 points over the year on electricity.