Ofgem’s Updated Price Cap
Today marks the implementation of Ofgem’s revised energy price cap, affecting the majority of households and resulting in an average five percent increase in energy costs.
Financial Impact on Consumers
Households using an average amount of gas and electricity will witness an annual bill surge by £94. Ofgem discloses that the annual bill for a typical household, paying by direct debit, has climbed from £1,834 to £1,928.
Dynamics of the Price Cap
While approximately 29 million Britons fall under the price cap, it’s important to understand that the cap doesn’t establish a total limit on energy payments. Instead, it regulates the cost per unit of gas and electricity consumed and sets a maximum daily standing charge.
Revised Charges and Financial Adjustments
Starting today, direct debit households will face increased charges of 7.42p per kilowatt-hour (kWh) for gas and 28.62p per kWh for electricity. These rates have risen from the previous figures of 6.89p and 27.35p, respectively. The adjustment seeks to accommodate current operational and strategic needs as Ofgem evaluates alternative options to strengthen the industry’s financial standing.
Ongoing Concerns and Future Plans
Ofgem notes a substantial surge in energy debt and arrears, amounting to £2.9 billion between July and September. Charities express worries about the impact on individuals struggling to pay essential bills. To address these challenges, Ofgem proposes adding £16 to a typical household bill between April and March 2025. This financial injection aims to support prepayment plans and debt write-offs.
Fuel poverty charity National Energy Action advocates for a comprehensive approach, including a help-to-repay scheme, discounted social tariffs, and a home energy efficiency program. Alastair Douglas, CEO of TotallyMoney, advises consumers to explore available grants and benefits during these challenging times and emphasizes proactive communication with energy providers for tailored support.
Source：express.co.uk
