15m energy bills will rise after Ofgem ups price cap

 

ABOUT 15million households will see their energy bills rise after regulator Ofgem increased price caps designed to protect those on poor value deals.

 

The energy watchdog is raising the cap for default and standard variable gas and electricity tariffs by £117 to £1,254 a year in April.

 

The cap for pre-payment meter customers will also increase, by £106 to £1,242.

 

Ofgem said the rises reflected increases in wholesale costs, rather than any profiteering by the energy companies, and insisted those affected would still pay a ‘fair price’.

 

The caps, introduced last month, would save affected customers up to £100 a year, the watchdog said.

 

However, Martin Lewis, founder of MoneySavingExpert.com and its Cheap Energy Club, was not convinced. ‘The much-talked-about, much-vaunted but ill-thought-through price cap will now feel like a damp squib to most people,’ he said. ‘It may have cut bills for three months but, from April, the new rate jumps up ten per cent.’

 

He warned the cap could be even higher than £1,254 a year, depending on energy use.

 

Dermot Nolan, Ofgem chief executive, said: ‘Under the caps, households on default tariffs are protected and will always pay a fair price for their energy, even though the levels will increase from April 1.’

 

Gillian Guy, of Citizens Advice, agreed prices ‘would be higher still without the cap’ but said there were ‘big savings to be made by switching supplier or tariff’.

 

 

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