Energy bills are set to increase by up to £ 100 for 15 million British households as Ofgem raises the cap
Energy bills are set to increase by up to £ 100 for 15 million British households as Ofgem raises the cap
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Energy bills could rise by nearly £100 for 15 million households across the UK after Ofgem has raised its price cap.

The energy regulator said that suppliers could pass on to customers the cost of rising gas and electricity prices.

Ofgem said that from April 1 its price cap could rise from £96 to £1,138 for around 11 million households on their supplier’s default tariff.

A further four million households with pre-payment metres could see their bills jump from £87 to £1,156.

Increases in the energy bill are never welcome, particularly as many households are struggling with the pandemic’s impact. “We have carefully examined these changes to ensure that clients only pay a fair price for their energy,” said Jonathan Brearley, chief executive of Ofgem.

The decision comes on top of an additional increase of £ 23 that energy suppliers were allowed to charge bad debt to customers.

The companies struggled to get some households to pay their bills during the crisis, so Ofgem decided that they needed to allow suppliers to spread that cost across the nation.

The latest announcement more than wipes out the gains made by households in October, when since the policy was introduced in January 2019, the price cap dropped by £ 84 to a record low.

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Once every 6 months, Ofgem reviews and alters the price cap.

He added: “The price cap offers a safety net against poor pricing practises, saving customers up to £100 a year, but if they want to avoid the increase in April they should shop around for a cheaper deal.

“The government and Ofgem have been working to support customers through this difficult time with the energy industry and consumer groups, and I urge anyone who is concerned about paying their energy bills to contact their supplier and access the assistance available.”

Based on the use of an average household, the £1,138 annual cap is calculated. The suppliers of energy must be priced below that cap. A few pounds below the cap level, most set their prices.