The energy bill from ScottishPower sent Richard Palmer into an immediate panic. It said he had to pay more than £8,400 straight away or risk his credit history being impaired for years.

The 76-year-old felt he had no option so he paid the bill, using half of his savings to do so, even though it amounted to nine times what his annual payment would normally be.

He was a victim of a massive miscalculation by the energy company that caused him an enormous amount of anxiety, according to his daughter, Anne.

The Palmer case is “quite shocking”, according to Simon Francis of the End Fuel Poverty Coalition, and stood out from others they had dealt with because of its size.

It emerged in a week of bad news on energy costs for millions of people: the energy price cap in Great Britain is to rise by 13% from July.

In Palmer’s case, the bill in March demanding payment of £8,413 told him that a credit default would be registered against his account if he did not pay it. This type of marker remains on a credit file for six years and could have rendered him unable to get a mobile phone or satellite TV contract.

“The tone and urgency of the letter caused him significant distress, and he felt he had no choice but to call them immediately and pay the full amount on the spot,” says Anne.

“He is elderly, vulnerable and easily panicked by official‑looking correspondence, and the impact on him was considerable.”

In December, ScottishPower had sent Palmer a letter to say that his gas and electricity bills would be about £922 for the entire year. He lives in a small, two-bedroom bungalow, which is fitted with solar panels.

And when his daughter examined her father’s bank accounts, she found he had been charged £433 twice in November.

Anne complained to ScottishPower but a month went by without any response, and she says the company had refused to engage with her as she was not the account holder.

When Guardian Money contacted ScottishPower, it said the mistake had resulted from an incorrect meter reading from 2022 being used to determine his bill.

ScottishPower says it has refunded £9,000 to Palmer – which included a refund of the double £433 payment – and apologised to him and his daughter. It says it has introduced enhanced checks to stop something similar happening to others. Palmer’s account, now £61 in credit, has also been given markers to say that he is vulnerable.

“We’re very sorry for the billing issues experienced and the difficulties in getting these resolved, which fell far below our usual standards,” a statement from the company said.

“We have fully corrected [his] account and meter readings and refunded a total of £9,000 to him. We’re also discussing a goodwill payment with his daughter in recognition of the distress and inconvenience caused while we rectified his account.”

Anne says her father had been offered £500, which she rejected, but that they had decided to accept a subsequent goodwill offer of £1,000.

Earlier this year, ScottishPower was ranked as Great Britain’s worst energy supplier for customer service in a survey from the consumer group Which?.

Simon Francis says the Palmer case “is beyond the pale in terms of the level of error that has been allowed by ScottishPower. There should be a lot of checks and balances in place to make sure people who are vulnerable do not end up with bills like this.”

He adds: “You’d really think that if an older pensioner, who presumably isn’t used to spending huge chunks of money, suddenly rang up ScottishPower and transferred £8,500 to the company, they would have flagged that.”

the increase in the energy price cap means Meanwhile, the average gas and electricity bill will rise to £1,862 a year from 1 July until the end of September – up from £1,641 a year during April to June.

However, Martin Lewis, the founder of MoneySavingExpert.com, says that for most people, the price cap rise is “voluntary – it can and should be avoided”.

He says: “These changes only apply to those on firms’ bog-standard tariffs. Those on fixes won’t see a rise. And that means everyone on the price cap should consider getting off it if they can.”

The most obvious way to do that is to lock into a fixed deal that is cheaper than the current cap. Do that, says Lewis, and you start saving straight away, and then from July, when the increase takes effect, your fixed tariff will be even cheaper than the cap.

Your exact cheapest tariff will depend on your usage and where you live, so ensure you do a whole-of-market comparison, he says.

* Names have been changed