More than 10 million households cannot afford to pay their inflated energy bills, according to research by the price comparison and switching site uSwitch.com.

Annual energy bills have soared from an average of £912 in January, to £1,127 today, and they could reach £1,467 by the end of the year if warnings are fulfilled. That would mean an unheard-of 61% increase in household energy bills in 2008.

As families' disposable incomes are falling at their fastest rate since the 1970s, millions are already struggling to pay the bills, uSwitch found.  Eight million households (31%) found it either very or fairly difficult to pay their energy bills even before a second wave of price rises hit them at the end of July.

Gas and electricity bills have soared by 23% on average in recent weeks for those affected by the price rises - adding an extra £20 a month or £239 a year to bills. If this trend continues, 10 million households (39%) say they will not be able to afford any extra payments, while almost one in five say the most they can afford to pay is an extra £10 a month. Only one in 10 say they could pay an additional £20 a month.

Half of all British households (13 million) will cut down on their winter heating to save on bills: 54% will become more energy efficient and almost four million homes (15%) will cook fewer hot meals to save money.

Pensioners have been disproportionately hit by the price rises, but they are not alone: while 44% of over-55s claim they can't afford price rises, 40% of 35-44 and 45-54 year-olds cannot afford the extra costs either.

With wholesale gas prices for the coming winter increasing by 89% on the previous winter, and residential profits for the first half of 2008 down across the industry, consumers were warned earlier this year to expect further price rises of 40% before the end of the year.

This would plunge an extra 1.6 million into fuel poverty, taking the total from 4.5 million to 6.1 million, and mean that spending on energy would account for 5% of the average household's net income. Almost one in three (30%) of joint income families with children, and almost one in two (47%) single income families are finding it hard to pay the bills.

"The second wave of energy price rises has put the final nail in the coffin for affordable energy. News of the Government's much speculated £150 one-off rebate for families receiving child benefit will provide respite for some households, but for others, it will be a drop in the ocean. The meteoric rise in the cost of living is affecting virtually every household and age group - it is leaving a hole in our pockets that pay rises alone cannot fill,” said Ann Robinson, Director of Consumer Policy at uSwitch.com.

"Households who are concerned about their jobs, their homes and their ongoing ability to pay their bills will be left with no choice but to cut back on both heating and eating this winter. Soaring wholesale gas prices have made their impact on suppliers' profits and ultimately on consumer bills.

“The government needs to provide a strategy and regulatory environment to ensure that the lights stay on at an affordable price. But the bigger obstacle will be making the longer term adjustment to pay for far higher energy prices to plan and invest for our country's future energy needs.

"With energy bills continuing to burn a hole in households' dwindling pockets, consumers need to take steps to minimise their energy usage and reduce the amount they pay. Sourcing the cheapest provider is one means of holding on to the pennies but adopting more energy efficient measures will also help.

"This is not just a short-term spike. Consumers cannot afford to ignore this - they need to take action now to stand any chance of limiting the impact of higher prices. Online energy plans remain a good option for those who want to pay a lower price now."

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