Home Business News Ofgem lifts energy price cap

Ofgem lifts energy price cap

by LLB Editor
5th Feb 21 9:40 am

Britain’s energy regulator has raised the cap on energy prices for millions of households for the first time in two years, after a big rise in wholesale energy costs.Ofgem announced that from April, the price cap will return to pre-pandemic levels as demand for energy has recovered, which has pushed wholesale prices back up to more normal levels.

For six months from 1 April, the price cap will increase by £96 to £1,138 for 11 million default tariff customers, and by £87 to £1,156 for 4 million pre-payment meter customers.

Peter Earl, head of energy at the price comparison site comparethemarket.com, said: “Raising energy costs for millions of households by an average of £96 is an extraordinary move in the current environment. It calls into question the whole point of a price cap which was designed to protect the most vulnerable households.

“Many are already struggling with the financial impact of the pandemic – our research shows that nearly three out of 10 (29%) families with children at home struggle to pay their bills every week – and this announcement coincides with the shock of energy bills being received after a winter spent in lockdown.

“The additional £23 hit announced earlier this week to recover the costs of unpaid bills in the cap’s ‘Adjustment Allowance’ ignores the fact that many are still in a very difficult and precarious financial situation. It undoes the good work by the industry in supporting customers through the pandemic, which is far from over.”

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