Energy regulator Ofgem today announced that the energy price cap could be reviewed every three months instead of twice a year.
It comes as staying on top of energy bills is becoming a daily battle for many. The recent increase in the energy price cap, which has added almost £700 a year to the average household’s bills, has pushed many finely crafted budgets to breaking point.
Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Adjusting the cap more regularly in the current high and rising inflation environment means energy bills will go up more frequently, which could spell disaster for households already struggling to stay financially afloat. With the cost of seemingly everything else also on the up, more regular price rises will be a worry for many.
“However, smaller but more frequent price changes would be more palatable than less frequent but sharp price hikes for many consumers as it provides greater consistency. It is easier to budget for smaller price hikes than larger ones.
“A more regular review of the energy price cap would mean that prices would come down as quickly as they go up. However, high inflation means the latter will be a reality for some time. As such, it is important to regularly review your spending habits to ensure that you are living with within your means and plan ahead to avoid money worries in future.
“Those struggling to keep on top their energy bills needn’t suffer in silence – there is support out there. Energy companies have schemes to help people who are struggling to afford their bills.”