Latest news with #wholesaleprices
Yahoo
27-05-2025
- Business
- Yahoo
Cost of steak goes up in supermarkets as food inflation rises for fourth month
Food inflation has continued its upward trend for the fourth month in a row this May, with rising wholesale meat prices pushing up the cost of steak on supermarket shelves, according to the latest data. Despite this, shop prices overall are still in deflation, being 0.1 per cent cheaper than they were a year ago and maintaining the same level as in April, according to the British Retail Consortium (BRC) Price Index. Non-food items saw a further drop in deflation to 1.5 per cent, a slight decrease from April's figure of 1.4 per cent. However, deflation has slowed down within certain categories, such as fashion and furniture, as retailers have started to scale back their heavy discounting strategies. The BRC noted that electrical goods experienced a sharper fall in prices as shops attempted to stimulate consumer spending in anticipation of any potential repercussions from US tariffs. Yet food prices have increased by 2.8 per cent compared to last year, a rise from the 2.6 per cent recorded in April. READ MORE: Keir Starmer considering DWP benefit cut changes after PIP backlash READ MORE: DWP PIP benefits £47 change will 'push people deeper into poverty', charity warns The price of fresh food, in particular, has surged, now standing at 2.4 per cent higher than in May of the previous year, up from April's 1.8 per cent. Ambient food inflation has seen a slight decline, dropping to 3.3 per cent from the 3.6 per cent observed in April. Helen Dickinson, BRC chief executive, commented: "While overall shop prices remain unchanged in May, food inflation rose for the fourth consecutive month. "Fresh foods were the main driver, and red meat eaters may have noticed their steak got a little more expensive as wholesale beef prices increased. "With retailers now absorbing the additional £5 billion in costs from April's increased employer national insurance contributions and national living wage, it is no surprise that inflation is rearing its head once again. "Later this year, retailers face another £2 billion in costs from the new packaging tax, and there are further employment costs on the horizon from the implementation of the Employment Rights Bill. Government must ensure the Employment Rights Bill is fit for purpose, supporting workers' rights while protecting jobs and investment for growth. "If statutory costs continue to rise for retailers, households will have to brace themselves for more difficult times ahead as prices rise faster." Mike Watkins, head of retailer and business insight at NielsenIQ, remarked: "Whilst shoppers are seeing savings at the checkout as retailers increase promotional activity, increasing prices is still an extra challenge to consumer spending alongside rising household bills. "If consumer confidence remains weak as looks likely, then retailers may have to work harder to encourage shoppers to spend over the summer."
Forbes
23-05-2025
- Business
- Forbes
Regulator Confirms Price Cap Will Fall £129 To £1,720 From July
23 May: Ofgem Attributes 7% Fall To Declining Wholesale Prices Energy market regulator Ofgem said today that the cap on the cost of units of gas and electricity and associated standing charges will fall by 7% (£129) a year when it is next revised on 1 July, writes Kevin Pratt. The reduction, which brings the cap down to £1,720 for a household with what is deemed typical usage (2,700kWh electricity, 11,500kWh gas per annum), is adjusted quarterly to reflect changes in wholesale energy prices and other costs faced by suppliers. The cap rose by 6% to £1,849 on 1 April. Along with steep increases in other household costs such as water bills and council tax payments, this hike was blamed for a sharp rise in the annual rate of inflation last month. On Tuesday, the Office for National Statistics announced a rise to 3.5% from 2.6% in March, stoking fears that the Bank of England will row back on plans to cut interest rates. While the fall in the cap will be welcomed by hard-pressed consumers, it does not reverse the impact of increases in the past 12 months. As recently as January, the cap stood at £1,738, and this July's cap will be £152 (10%) higher than the same period last year. Further modest reductions are forecast for October and January 2026 (see story below), but the trajectory of the cap will always hinge primarily on wholesale market prices, which themselves are subject to the vagaries of weather-related demand and international trade conditions. The cap applies to variable-rate dual-fuel tariffs paid in arrears by direct debit. Cheaper fixed-rate alternatives are available, where the price-per-unit of energy is locked in for 12 months or longer, although such tariffs can become relatively expensive if the cap falls during the period, and there are usually exit penalties to pay to leave the fix early. The number of households moving to fixed-rate deals is steadily increasing. Ofgem figures show that, as at 1 April 2025, 65% of customers (around 21 million) were on variable rate tariffs governed by the price cap, with 35% (8 million) on fixed contracts. This compares to 72% of customers on variable rates last quarter (1 January 2025) and 85% last year (1 April 2024). Commenting on today's announcement, Tim Jarvis at Ofgem said: 'A fall in the price cap will be welcome news for consumers, and reflects a reduction in the international price of wholesale gas. However, we're acutely aware that prices remain high, and some continue to struggle with the cost of energy. 'The first thing I want to remind people is that you don't have to pay the price cap – there are better deals out there so it's important to shop around, and talk to your existing supplier about the best deal they can offer you. And changing your payment method to direct debit or smart pay as you go can save you up to £136. 'In the longer term, we need an energy system where prices are insulated from the volatile international gas market, and which ensures more stable prices and energy security. And we're working closely with government to get the investment we need to reach our clean power and net zero targets as quickly as possible.' Earlier this week the government signalled that it will revise the eligibility criteria for Winter Fuel Payments in its Autumn Budget. It drew widespread criticism last year when changes were introduced which stopped the payments to around nine million pensioners not in receipt of pension credit benefits. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 20 May: Households At Mercy Of Wholesale Price Increases Analyst Cornwall Insight is predicting the energy price cap will fall by 7% – from £1,849 to £1,720 – at its next quarterly reset on 1 July, writes Kevin Pratt. Previously, Cornwall had forecast a 9% drop to £1,683. It says the change reflects higher wholesale energy prices and increased distribution network and policy charges. These include an addition to the cap of around £28 to help suppliers recover costs associated with consumer debts. The cap, which does not limit the size of bills, represents the annual cost for a household with typical usage (2,700kWh electricity, 11,500kWh gas) on a variable rate tariff and paying by direct debit. It is possible to undercut the price cap by switching to a fixed-rate tariff, where prices currently start at around £1,615 a year for a typical-usage household. The 6% increase in the cap on 1 April (see story below) is expected to contribute to a significant rise in the rate of inflation when it is announced tomorrow. Currently standing at 2.6%, commentators fear it could spike to 3.6% when other April price increases, such as to council tax and water bills, are factored in. The Bank of England said earlier this month that inflation will rise to 3.5% in the coming months but added that the longer-term trend is downwards. This encouraged it to reduce the benchmark Bank Rate to 4.25%. Cornwall expects a modest fall in the cap, which is adjusted quarterly, in October, with a further fall in January 2026. However, it says these reductions are not locked in because of variable factors such as weather-related demand, the impact of trade tariffs and the war in Ukraine. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 28 April: Analyst Warns That Volatility Continues To Stalk Market Market analyst Cornwall Insight says the cap on how much firms can charge households for the energy they use will fall by an average of 9% when the next scheduled review comes into effect on 1 July, writes Kevin Pratt. Set by the regulator, Ofgem, the cap is revised every three months to reflect wholesale energy prices paid by suppliers. At the beginning of April, it rose by 6%, or £111 a year, to £1,849. If Cornwall Insight's prediction is accurate, annual bills will fall by £166 in July to reach £1,683. The cap does not put a ceiling on bills. Rather, it limits what firms can charge per unit of gas and electricity and for associated standing charges. Actual bills always reflect consumption levels. The quoted figure is for a typical household with a dual-fuel tariff paying by direct debit. Cornwall Insight expects further reductions in the cap in October and January 2026. It said the recent decline in wholesale prices 'has been driven by a mix of geopolitical and market developments, including the United States' decision to introduce tariffs… and the impact of above-average temperatures, which has reduced demand expectations and eased pressure on short-term prices.' The analyst warned, however, that the market remains volatile, reducing the certainty with which forecasts can be made: 'There are many moving parts, and with the July cap still a month away from being finalised, it is too early to say whether these reductions will hold.' In July 2024, the cap stood at £1,568, with subsequent increases blamed on insecure gas supplies and high demand over the winter months. It peaked at £3,549 in 2022 in the wake of Russia's invasion of Ukraine in 2022, although government subsidies kept the limit on prices at £2,500 a year. When the cap was introduced in 2019 it was £1,137 and as recently as October 2021 it was £1,277. Our energy partner, Uswitch, says fixed-rate tariffs continue to undercut the expected July 2025 price cap, with deals available around the £1,600-a-year mark for typical households. Fixed tariffs lock in the price per unit for 12 to 24 months, providing certainly against the backdrop of market volatility. However, should prices fall sharply, the risk is that the customer will miss out on savings for the duration of their fix. There is usually an exit penalty of £100 or more to leave a dual-fuel fixed-rate tariff early, although switches within six weeks of the tariff ending are penalty-free. Consumers can compare energy deals from leading suppliers. Switching should take no more than 21 days, there is no interruption to supply and no requirement for work at your property, unless switching involves fitting a smart meter. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 1 April: Volatile Wholesale Markets Push Household Bills Higher Households are being urged to think about their energy usage and consider locking into a fixed-rate tariff as the new, higher energy cap of £1,849, comes into force today (1 April), writes Jo Thornhill. The price cap, which is reviewed every quarter, applies maximum rates per unit of gas and electricity and associated standing charges. It is set by the regulator, Ofgem, with reference to the price of wholesale energy and other costs across the distribution network. Today's 6.4% rise, from the previous figure of £1,738, means annual bills will increase by £111 for the average household. Actual bills are determined by consumption. One way to avoid being hit by rises in the cap is to switch to a fixed-rate energy tariff. These plans, which last for 12 – 24 months depending on the deal, lock-in a guaranteed rate that is not affected by changes to the cap during the period. The potential downside is that, if the cap falls below the rate charged by the tariff, the customer will be marooned with higher costs and will often face exit penalties to leave the deal before the end of the term. These typically run at £50 per fuel type. Many analysts are predicting a drop in the price cap for July 2025 and potentially again in October. Cornwall Insight said wholesale markets remain volatile, but it expects a lower cap in the summer: 'The July cap is forecast to fall to £1,712 a year for a typical dual fuel consumer. The fall would represent a 7% drop on April's £1,849 cap, with an average customer paying £137 less annual equivalent a year. 'The fall in predictions would take the July cap to below the current rate of £1,738 per year, albeit still hundreds of pounds above historic averages. 'Looking further ahead we are forecasting October's prices to rise slightly on the July assessment, before falling again in January 2026. Volatility in the global energy markets remain a key variable, and therefore this view will be subject to change.' Alice Haines at advisor BestInvest said: 'There are far more fixed-rate deals available on the market now than there were during the energy crisis. 'To find the right tariff for your needs, shop around and consider all options including cheaper variable tariffs from other providers, tracker products that change daily based on wholesale cost, or time-of-use tariffs that can benefit people charging electric vehicles overnight or those that want to take better advantage of off-peak rates.' 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner Around 22 million households in England, Wales and Scotland will see their annual bills rise by a shock 6.4% when the latest price cap takes effect on 1 April, writes Kevin Pratt. The cap, set by the regulator, Ofgem, is reviewed every quarter based primarily on wholesale energy costs. It limits what firms can charge for each unit of energy used and for associated standing charges and has now risen for three consecutive quarters. Analysts predicted a rise of 5% but Ofgem says a recent spike in energy costs is responsible for the inflation-busting increase, which will take the average bill to £1,849 for the second quarter of the year – up £111 from its current £1,738. Water bills and council tax payments will also rise in April. The Bank of England has forecast that inflation could rise from 3% to 3.7% later this year, with persistently high energy prices contributing to the problems faced by struggling households. The new cap is 9.4% (£159) higher than this time last year. Wholesale prices have risen because of high demand over the winter months and tensions over conflicts in Ukraine and the Middle East. The UK remains heavily dependent on imports of natural gas via pipelines from Europe and, in its liquid state, from the US and Qatar. The April price increase affects those users with standard variable tariffs (SVTs), which change to reflect market conditions. Ofgem says four million households have switched from SVTs to fixed-rate tariffs since November 2024, bringing the total to 11 million. The regulator says switching to a fixed tariff, where the price per unit is locked in for between 12 and 24 months, is one of the best ways to cut bills: 'There are a number of fixed, direct debit tariffs tracking below the April price cap level, with savings of around £50 available compared to the upcoming price cap level.' Neither the cap nor a fixed-rate tariff limits the actual size of bills, which are always determined by the amount of energy consumed. Ofgem is working with suppliers and the government to find ways to tackle the surging amount of energy bill debt without cutting off supplies to domestic properties. Total debts owed to suppliers now stand at £3.8 billion. Anyone struggling to pay their bills is urged to contact their supplier as soon as possible to discuss support measures. The government is also planning to upgrade the Warm Home Discount scheme to widen its eligibility criteria and cut £150 off the bills of an additional 2.7 million households in the winter of 2025-26. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 2 January: Wholesale Market Turmoil Triggers Gloomy Prediction Households are paying more for their gas and electricity from the start of 2025 following the 1.2% increase in the official price cap, which limits what suppliers can charge per unit of energy and associated standing charges, writes Kevin Pratt. Typical 'dual fuel' annual energy bills, based on average consumption and paid by direct debit, rose from £1,717 to £1,738 on 1 January. For households paying quarterly in arrears by cash or cheque the rise was from £1,829 to £1,851, while those with prepayment meters saw annual bills increase from £1,669 to £1,690. The price cap is set by Ofgem, the energy market regulator. Based on wholesale market prices, it is revised every three months, with the next update due on 1 April. Analyst Cornwall Insight is predicting the cap will then increase to £1,785, a further rise of almost 3%. The firm's principal consultant, Dr Craig Lowrey, said: 'The news of a rise in our forecast will be disappointing to households, which will no doubt have been hoping for relief from recent cap rises. 'However, the turbulence in wholesale markets – a level of volatility we haven't seen for months – reminds us to remain cautious of predictions, which could very well increase or decrease several times before the April cap is set [at the end of February]. 'With a Trump presidency on the horizon, and an uncertain geopolitical situation in the Ukraine and the Middle East, wholesale market volatility looks set to remain.' The concern regarding President Trump's return to the White House on 20 January is that he might restrict exports of liquid natural gas, cutting costs for US consumers but reducing supply and increasing prices elsewhere. Ofgem is urging energy customers to look for cheaper tariffs. It says those with standard variable tariffs could save around £140 a year by switching to a fixed-rate, fixed-term deal. It also says that the five million customers who pay by cash and cheque could save £100 a year by switching from these 'standard credit' payments to direct debit payments or a 'smart' prepayment deal. Anyone concerned about being able to afford their bills should contact their supplier, which is obliged by the regulator to offer constructive support and agree to an affordable payment plan. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 12 December: Choice Of Tariffs With/Without Standing Charges Energy firms will be required to offer tariffs with no standing charges under rules proposed by energy regulator, Ofgem, writes Brean Horne. At present, the vast majority of tariffs combine the cost of the energy with standing charges that cover delivery and operational costs. These charges are levied at a fixed daily rate that must be paid even if customers reduce their consumption. Ofgem conducted a review of standing charges earlier this year, with many respondents asking for them to be removed to make it easier to manage bills. This would mean transferring the costs covered by standing charges to the cost per unit of energy, pushing up the bills for those using high amounts of energy, including vulnerable customers charging medical equipment. Ofgem is consulting on the introduction of tariffs with no standing charges that would be offered alongside existing tariffs that include the charge, giving customers a choice. Both tariffs would operate within the regulator's price cap regime. The intention is to have the new structure in place by winter 2025/26. Tim Jarvis at Ofgem said: 'We know many households continue to struggle with bills after the events of the energy crisis, which is why earlier this year, we took steps to consider all the issues around affordability and debt – including the impact of the standing charge. 'Today we're setting out the next steps in what Ofgem can do to meet these challenges, as part of our work to make sure the energy market is working in consumers' interests. 'Many people feel very strongly that standing charges are unfair and prevent them from being able to manage their bills effectively. 'We want to give consumers the ability to make the choice that's right for them without putting any one group of consumers at a disadvantage. And by having a zero standing charge tariff, we would create that choice for everyone. 'We have also set out plans to increase and standardise the support people struggling with energy debt will receive, as well as options for practical help for those households who are in real difficulty with debt built up during the energy crisis. 'We will continue to use all the tools at our disposal to support customers but know there is more to do, so it is important that all of us – government, the energy sector and charities – do everything we can to help those who need it.' Although Ofgem's proposal has received positive feedback, experts argue that more needs to be done to bring significant savings to customers. Dr Craig Lowrey at analyst Cornwall Insight said: 'Standing charges make up about 20% of household gas and electricity bills. As a result, those households looking to save money by reducing energy use may find no-standing charge tariffs helpful, offering a more straightforward way to manage their bills. 'However, the issue is more complex. Zero-standing charge tariffs would come with higher unit costs to cover the maintenance of the network and other expenses that would normally be included in the standing charge. As such, these tariffs may not be ideal for vulnerable groups, especially those living in less energy-efficient homes or with higher energy needs. 'An alternative would be to cross-subsidise the zero standing charge tariffs for eligible households through higher standing charges for non-eligible households and/or through levels paid by business consumers. However, this is not without its own challenges – lower standing charges for one group of customers means that the revenue foregone must be recovered from elsewhere. 'Ultimately, adjusting tariffs alone is unlikely to bring significant savings for consumers. A more sustainable, long-term solution is needed to lower overall bills, one that reduces our reliance on the volatile global wholesale market and invests in homegrown, sustainable energy.' Ofgem is proposing to introduce a 'Debt Guarantee' to support vulnerable customers who fall behind on payments. The package of measures, under which customers will be given 'consistent, compassionate and tailored' support to help them manage their debts, includes: introducing rules to make 'ability to pay' assessments more consistent across suppliers, ensuring consumers are able to repay their debts in an affordable and sustainable way requiring suppliers to accept debt repayment offers from third parties such as debt advice agencies or consumer groups. This would make it easier for households to get help and improve collaboration between suppliers and third parties strengthen rules on suppliers' processes for working with third parties acting on behalf of consumers improving how suppliers can help consumers struggling with their bills access additional support from a different organisation. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 22 November: Ofgem Delivers More Bad News For Consumers Typical energy prices for households in England, Wales and Scotland will increase by £21 a year from 1 January 2025, according to market regulator Ofgem, writes Brean Horne. The price cap on how much suppliers can charge per unit of energy and standing chargers will rise by 1.2% from £1,717 to £1,738 a year. It will change again in April to reflect wholesale prices movements in the first quarter of next year. Analyst Cornwall Insight is predicting a 1.4% drop in the cap from 1 April, bringing it back down to £1,713 per year. The cap refers to the cost of a year's energy supply for a typical household on a dual-fuel gas and electricity tariff, paying by direct debit. For typical-use households on a prepayment meter, the cap will rise to £1,690 a year from 1 January. The typical bill for those paying by cash or cheque will increase to £1,851 per year. It's important to note that the price cap does not limit the size of actual bills, which are always determined by the amount of energy consumed. Typical consumption rates for the average household to calculate the price cap are 11,500 kWh per year of gas and 2,700 kWh per year of electricity. Wholesale price rises, due to geopolitical tensions, global supply pressures and winter weather conditions, have been cited as the key reason for the latest increase in bills, which comes on the back of a 10% hike in the level of the cap on 1 October. Dr Craig Lowrey at Cornwall Insight said: 'This latest increase underlines the continuing volatility of the energy market, which is still experiencing the lingering effects of the energy crisis. 'While the forecasted reductions from April offer some hope, they remain well above historical norms and do little to alleviate the immediate pressure on consumers this winter. 'There's little point in waiting for the market to settle on its own – there's no going back to so-called 'normal' prices, unfortunately, this is the new reality. 'Any reform of the price cap will be just one piece of the solution – what's urgently needed is a comprehensive approach, including targeted support such as social tariffs and sustained investment in domestic renewable energy sources, to help shield consumers from ongoing market shocks.' Industry experts warn that the price cap increase in January will greatly impact vulnerable customers as energy bills are still considerably higher than pre-Covid levels. Concerns are particularly high for an estimated 11 million pensioners in England and Wales who have lost their Winter Fuel Allowance this year. The benefit of between £100 and £300 is now restricted to those in receipt of Pension Credit or other means-tested benefits. The Scottish government is also withdrawing winter fuel payments from some pensioners. Danni Hewson at AJ Bell commented: 'Twenty-one pounds might not seem a lot in the grand scheme of things but the fact the rise in the price cap comes off the back of a chunky October increase and is imposed just as households need to use more power will be tough for some to take. 'This year there is no cost of living payment to cushion the impact and for millions of pensioners, there's also the troubling issue of scrapped winter fuel payments. 'People have made changes, they've lowered thermostats, added draught excluders and limited the number of rooms they heat. There are new tariffs which could offer ways to bring down bills, but for those struggling under the weight of energy debt, today's announcement will just pile on the worry. 'While inflation has come down, prices haven't, and with the prospect that energy costs are unlikely to return to pre-2022 levels, finding a sustainable solution to the UK's long-term energy situation must remain a priority.' Currently, the cheapest fixed rate deal for a typical dual fuel customer paying by direct debit is from British Gas priced at just over £1,570 (based on data from Uswitch, November 2024 – note that a smart meter is required). The tariff also levies a £50 per fuel exit fee if you choose to switch to a different deal before the end of the 18-month contract. However, under Ofgem's rules, exit fees don't apply if you switch within 49 days of your deal coming to an end. Find out how to save on your energy bills with our guide. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 18 November: Analyst Predicts Another Blow To Households Domestic energy bills for typical households are forecast to rise by 1% from January 2025, writes Brean Horne. Analyst Cornwall Insight predicts the cap on how much suppliers can charge per unit of energy and associated standing charges will rise to £1,736 a year from its current level of £1,717. The cap is set by the market regulator, Ofgem. It does not limit bills, which are determined by the amount of energy consumed. The figure quoted is the amount a household with typical usage can expect to pay if they have a dual fuel gas and electricity tariff, and pay by direct debit. Cornwall's predictions are usually within a few pounds of the official price cap, with January's figure to be confirmed by Ofgem this Friday, 22 November. Ofgem sets the cap on the basis of wholesale energy price movements in the preceding quarter. The analyst attributes the rise in the cap – which follows a 10% increase on 1 October – to concerns about the supply of energy in the face of continued geopolitical tension, as well as weather disruption and maintenance work on Norwegian gas infrastructure. Energy supplier EDF is also forecasting that January's cap could increase to £1,736 for a household with average consumption levels. However, customers may find some respite in energy bills from spring next year, as Cornwall expects the cap level to ease back from 1 April 2025. Dr Craig Lowrey at Cornwall said: 'Our final price cap forecast for January indicates, as expected, bills will remain largely unchanged from October. 'Supply concerns have kept the market as volatile as earlier in the year, and additional charges have remained relatively stable, so prices have stayed flat. 'While we may have seen this coming, the news that prices will not drop from the rises in the autumn will still be disappointing to many as we move into the colder months.' Dr Lowrey said that fuel poverty has occupied political agendas for years, with little long-term progress in finding a solution, suggesting millions of households will not heat their homes to recommended temperatures this winter: 'With it being widely accepted that high prices are here to stay, we need to see action. 'Options like social tariffs, adjustments to price caps, benefit restructuring, or other targeted support for vulnerable households must be seriously considered.' Ofgem is reviewing the way the price cap works with potential changes to standing charges expected over the coming year. Switching to a fixed rate energy deal could help customers secure a cheaper tariff. Currently, the cheapest deal for a typical dual fuel customer paying by direct debit is from EDF, priced at £1,566.68 fixed for 12 months, according to Uswitch data. While this cost is less than both the current and predicted price cap for the coming quarter, customers may lose out if the price cap falls from next spring. Exit fees of £50 per fuel apply to leave the tariff early. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 29 October: Customers Urged To Check Pension Credit Eligibility British Gas is reopening its £140 million Energy Support Fund for customers struggling to pay their energy bills this winter, writes Brean Horne. The energy giant will relaunch the scheme, which provides grants of up to £2,000 to vulnerable customers, on 4 November 2024. The maximum grant represents a £500 increase on last year. In addition to grants, the fund can provide matched debt repayments for customers in arrears and non-repayable credit for prepayment meter customers. To qualify for the British Gas grant, customers must be a British Gas credit or prepayment customer living in England, Scotland or Wales and not received a grant from the British Gas Energy Trust within the last 12 months (other qualifying criteria apply). Applications for support can be made here from 4 November. British Gas is also writing to around two million of its customers urging them to apply for Pension Credit, which would see them eligible to claim up to £300 a year of Winter Fuel Payment. The government announced in the summer that the payment would be withdrawn from around 10 million pensioners not in receipt of Pension Credit. But it is estimated that around 760,000 pensioners who could be eligible are not claiming. Chris O'Shea, chief executive of Centrica, the parent company of British Gas, said: 'At the end of each week or month, there will be those that have little, if any, money left after paying for life's essentials. 'We are committed to ensuring that all pensioners are fully informed about their eligibility for Pension Credit, which can make a significant difference in their financial wellbeing.' Emma Reynolds MP, minister for pensions, said: 'Pension Credit is a vital benefit. Not only is it worth £3,900 a year on average, but it also acts as a gateway to other benefits. This means even just one pound could passport pensioners to extra help including help with Council tax, Housing Benefit, and the Winter Fuel Payment.' If you're worried about your energy bills, contact your energy provider to see what support it can offer – many have similar schemes to the one offered by British Gas. Our guide on how to get help with your energy bills offers tips on keeping on top of your payments. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 1 October: Costly Winter Ahead For Millions Of Pensioners Stripped Of Winter Fuel Payment Energy prices for households in England, Wales and Scotland have risen by a typical £149 a year, as Ofgem's new quarterly price cap takes effect from today, writes Brean Horne. The energy market regulator increased its price cap by 10% from £1,568 to £1,717 a year from 1 October. The cap refers to the cost of energy for a typical household on a dual-fuel gas and electricity tariff, paying by direct debit. For typical-use households on a prepayment meter, the cap is now £1,669 a year. For those using other payment methods – such as cheque or cash – it stands at £1,829. Ofgem's price cap is reviewed every three months based on historic wholesale prices. However, it's important to note that the price cap does not limit the size of actual bills. Instead, it is a limit on how much suppliers can charge per unit of energy used and associated standing charges. Typical consumption rates for the average household to calculate the price cap are 11,500 kWh per year of gas and 2,700 kWh per year of electricity. The current price cap will remain in place until 1 January 2025 when, according to energy analyst Cornwall Insight, it will fall by 1% to £1,697. Dr Craig Lowrey at Cornwall Insight said: 'January to March, typically some of the coldest months of the year, often bring with them the biggest energy bills, and – while our latest forecast is welcome news – it remains subject to the volatile wholesale gas and electricity markets. 'There remain a further six weeks or so for the wholesale market to influence our forecasts, and while the negligible quarter-on-quarter drop is welcome, it must be remembered that bills will still remain hundreds of pounds above historic levels.' Cornwall's optimism about the next cap setting has been countered by a prediction from energy supplier EDF, which says the cap may creep up in January. David Edmonds, head of pricing at the firm, said: 'We're still seeing a lot of volatility in global wholesale markets, which means our latest forecast has come in slightly higher at £1,721 for January to March 2025. 'This is due to a couple of factors including tensions in the Middle East, as well as between Russia and Ukraine, and unpredictable weather over the coming months. Given these uncertainties, it's not clear yet exactly where prices will go in the coming months before the window for [setting] Q1 prices closes in November.' The energy market is starting to see a resurgence of fixed-rate energy tariffs, giving customers the potential to save on their bills. Currently, the cheapest fixed rate deal for a typical dual fuel customer paying by direct debit is from British Gas priced at just under £1,538 (based on data from Uswitch, October 2024) – less than both the current and predicted price cap. However, this requires customers to have a smart meter installed if they don't already have one. It also levies a £50 per fuel exit fee if you choose to switch to a different deal before the end of the 12-month contract. However, under Ofgem's rules, exit fees don't apply if you switch within 49 days of your deal coming to an end. Experts are urging households with traditional meters to submit readings now so they can avoid being charged estimated usage under the new cap. Millions of pensioners in England and Wales will lose their Winter Fuel Payment this year – a tax-free payment of between £100 and £300 – as the payment becomes restricted to those of State Pension age in receipt of Pension Credit or other means-tested benefits. The Scottish government is also withdrawing winter fuel payments from some pensioners. Find out how to save on your energy bills with our guide. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 16 September: Customers Could Save An Average £75 A Year Compared To October's Price Cap Domestic energy customers could save an average of £75 a year with a new 12-month fixed rate tariff from British Gas, writes Brean Horne. The deal – British Gas Fixed Tariff 12M v14 – costs £136.83 per month or £1,642 per year for a typical dual fuel customer paying via direct debit. An early exit fee of £50 per fuel applies unless you switch to another British Gas tariff. Customers can apply for the deal through our energy partner, Uswitch, or directly at the British Gas website. The deal is among the cheapest 12-month fixed rate tariffs on the market – with customers switching before the energy price cap increases on 1 October could save £75 over the course of a year. The energy price cap represents the maximum amount that suppliers can charge for each unit of gas or electricity used and is set each quarter by market regulator Ofgem. On 1 October, the cap will rise by 10% to £1,717 from its current £1,568 and will remain at that level until 31 December. The new cap, which will apply from 1 January to 31 March 2025, will be announced on 25 November. British Gas predicts a modest increase of 1.63%, taking it to £1,745 per year. Customers hoping to lock in an energy deal for longer could opt for the British Gas The Longer Fix v9 which runs for 24 months. The deal costs £139.53 per month or £1,674.40 per year for a typical dual fuel customer and levies an early exit fee of £100 per fuel if you choose to switch before the end of the 24-month contract. However, under Ofgem's rules, exit fees don't apply if you switch within the last 49 days of the deal. Switching to a fixed-rate energy deal could save money, depending on what happens to the price cap from Spring next year and beyond. Currently, around 85% of UK households are on standard variable tariffs with their energy supplier. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 23 August: Typical Bills Up 10% As Winter Draws In Energy bills will rise by 10% from 1 October, when the main price cap run by Ofgem, the regulator, will increase from £1,568 to £1,717 a year – a rise of £149 in cash terms. The price cap, updated each quarter, limits what suppliers can charge for each unit of gas and electricity and associated daily standing charges. It does not control the size of bills, which are always determined by the amount of energy used. The figure of £1,717 reflects the usage of a typical household on a standard credit tariff paying by direct debit. Those paying quarterly by cheque or cash will see an increase in the cap from £1,668 to £1,829, a rise of £161 – these bills are higher because of the associated administrative costs. The cap for those with prepayment meters will increase from £1,522 to £1,669 a year, a £147 increase. Ofgem will continue to provide additional support to households at risk of losing their energy supply because they cannot afford to top-up their meter. The upcoming hike reflects increases seen in wholesale markets in recent weeks triggered by fears of supply disruption because of the threat of conflict in the Middle East. The October cap is £117 cheaper than it was in the fourth quarter of 2023, but the increase follows two successive reductions in April and July and deals a fresh blow to bill-payers who saw average annual energy costs soar above £2,000 in the wake of Russia's invasion of Ukraine. Prior to the invasion, the cap stood at £1,277. There are fears that the increase in energy bills at a time of peak consumption could eventually feed through into inflation figures. The annual rate at which prices are rising edged up from 2% to 2.2% in July. The hike will also coincide with the withdrawal by the government of the Winter Fuel Payment for those who do not receive Pension Credit. Joanna Elson at financial support charity Independent Age said: 'We urge the government to delay its Winter Fuel Payment decision to ensure the lives of older people in financial hardship are not put at risk as we approach winter. 'Last winter we spoke to too many older people who were forced to make painful cutbacks to reduce their energy bills. We heard distressing accounts of people going to bed in hats and coats and living in only one room as it was cheaper to heat. 'If the government goes ahead with restricting the Payment, before it has an effective way to ensure everyone who needs the financial support receives it, this could be the reality for more and more older people.' Ofgem has also issued a discussion paper reflecting its ongoing consultation on the use and level of standing charges, which cover the cost of energy infrastructure and support schemes such as the Warm Home Discount. These charges make a significant contribution to the size of bills and which are criticised for not reflecting consumption levels – someone using no power is still required to pay them. The regulator is proposing that tariffs be introduced without standing charges, with the costs moved to unit charges, thus incentivising energy saving. But the problem here is that households that have no choice but to use large amounts of energy – perhaps because of essential medical equipment or poor quality housing – would end up on the most expensive tariffs. Ofgem is inviting views on standing charges. Its consultation closes on 20 September 2024. 19 August: Regulator Announces Q4 Price Cap On Friday The typical bill for household energy could rise by £146 a year in the lead-up to winter, according to the latest trusted forecasts, writes Mark Hooson. Cornwall Insight, leading analysts in the energy market, has predicted that the price cap for October for a typical dual-fuel household will be £1,714 per year. That's up by around 9% compared to the current cap of £1,568 a year. The official figures will be published on Friday (23 August) when the energy market regulator Ofgem makes its quarterly announcement. Cornwall Insight's prediction is based on data observed between 1 August and 16 August. The cap is expected to rise again the following quarter starting from January 2025. Dr Craig Lowrey, principal consultant at Cornwall Insight commented: 'Following two consecutive falls in the cap, I'm sure many hoped we were on a steady path back to pre-crisis prices. However, the lingering impact of the energy crisis has left us with a market that's still highly volatile and quick to react to any bad news on the supply front.' Dr Lowrey added that, while a return to the extreme prices of recent years is not expected, it's unlikely that bills will return to what was once considered normal without 'significant intervention'. He said: 'The government will need to adopt a two-pronged approach to tackle rising energy bills. Immediate action is needed to ease the financial burden on households – such as the introduction of social tariffs, or reform of the price cap – but that's only part of the solution. We must also develop a long-term strategy to secure our energy future. This means a fundamental overhaul of our energy system, with a strong emphasis on increasing domestic energy production. 'Simply waiting for prices to drop on their own isn't an option, we need a proactive and forward-thinking approach to ensure long lasting energy affordability and security.' Richard Neudegg, director of regulation at energy comparison website said: 'This prediction compounds the worry that energy bills are going to rise just as we reach the season to switch the heating back on.' However, he added that bill payers can take action now to lock in certainty on how much they pay: 'There are a number of 12-month fixed deals available at rates cheaper than today's firm prediction, so run a comparison to see what energy tariffs are available to you.' The latest prediction follows news that the new Labour chancellor Rachel Reeves will scrap the universal Winter Fuel Payment, with payments being made only to those on means-tested benefits, including Pension Credit. The annual payments, worth between £100 and £300, were previously paid automatically to anyone claiming the state pension. While some have welcomed the move, pointing out that wealthier pensioners and even some expats in other countries were eligible for the payments, charity Age UK has launched a petition to reverse the decision, claiming that two million pensioners who badly need the money will not receive it. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 1 July: Forecasters Expect Costs To Rise In October Today, 1 July 2024, sees the energy market's domestic price cap fall by 7%, taking it from £1,890 to £1,568 – a fall of £122. But this is almost almost £300 above the level of the cap prior to Russia's invasion of Ukraine in February 2022, when the cap was £1,277. The cap, set by the regulator, Ofgem, limits what suppliers can charge per unit of gas and electricity consumed along with associated standing charges. It is not a cap on the size of bills, which are determined by consumption. The £1,568 figure represents the annual energy bill for a household with average consumption on a dual-fuel tariff and paying by direct debit. It applies to households in England, Wales and Scotland – Northern Ireland has its own energy market, which is not regulated by Ofgem. For an average household paying by prepayment meter the cap has fallen to £1,522 a year, while for an average household paying by standard credit (cash or cheque) the cap is £1,668 a year. The average household is said by Ofgem to use 2,700 kWh of electricity and 11,500 kWh of gas a year. Those paying by direct debit and prepayment meter pay less because of lower administration costs. Ofgem reviews the price cap and sets a level on how much a supplier can charge every three months. The next price cap will be announced on 27 August 2024 and will come into effect on 1 October 2024. Market Analyst Cornwall Insight is predicting that the main cap will then increase by £156 to £1,723. Dr Craig Lowrey, principal consultant at Cornwall, said: 'We are still facing an average 10% increase in bills from October, and as winter approaches this will put a strain on many household finances. 'While long-term solutions are being developed, it's critical to focus on immediate strategies to manage energy bills. Most political parties have proposed reforms to how energy bills are structured, with a review of standing charges front and centre. However, any change to bills creates winners and losers, so we urge whoever is in government come 5th July to proceed with caution. 'Additionally, we would encourage greater discussion on other reforms, such as social tariffs, which could support the pursuit of lower bills over the following months and years. 'Looking to long-term bill reduction, we've heard pledges about investing in wind farms, solar power, nuclear energy, and other renewable infrastructure from various parties. However, concrete details on the implementation of these plans are scarce. It's essential to be transparent with the public, these initiatives require substantial investment – and therefore cost – and time to come to fruition. 'While renewables are the path to sustainable bill reductions, it will take a long time for households to see these changes reflected in their bills.' Mike Thornton, chief executive of Energy Saving Trust, said: 'Today's confirmation that energy prices are coming down for the next quarter is very welcome. However, no one should take this lower price cap as a sign of stability. Forecasts show that energy prices are set to rise again this autumn and will stay high overall for the next decade. 'After the election the incoming UK government must prioritise policies that support people to use less energy and install cost effective energy efficiency improvements in their homes. This will be fundamental to bringing down energy bills, reducing carbon emissions and guaranteeing our energy security for the long term. 'A co-ordinated, long term retrofit plan for England which incentivises measures from improved insulation to electrified heat must be central to any incoming UK government's ambition. Now is the time to commit to making our homes ready for a net zero future and ending our dependence on volatile international fossil fuel markets for good.' Although energy prices are at their lowest rate since February 2022, when Russia's invasion of Ukraine triggered a global energy crisis, the cost of energy remains higher than pre-pandemic levels. Currently, the cheapest energy deal for a typical dual fuel customer, paying by direct debit is just under £1,490 – around £78 cheaper than the price cap. The EDF Energy EDF Ensure Jul25 is a variable rate tracker deal. Although this deal is currently the cheapest, it is subject to change every three months in line with Ofgem's price cap. That means if the price cap increases, this tariff will become more expensive. Customers may be able to save money by opting for a fixed rate energy tariff. That's because a fixed rate deal locks in a set price for the duration of the deal. The cheapest fixed rate deal is the Outfox the Market Super Fix'd 12m Jun-24 v3.0 tariff. A typical household can expect to pay around £130 per month or just over £1,560 for this deal. It levies an exit fee of £25 per fuel should you switch to a different tariff more than 49 days before this deal ends. For more money-saving tips, read our guide on how to cut your energy bills. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 24 May: Energy To Be At Centre Of Election Campaigning Domestic energy bills will fall in July when the latest price cap drops from £1,690 a year for an average household to £1,568 – but prices remain almost £300 above where they stood before Russia's invasion of Ukraine in February 2022, when the cap was £1,277. The cap is set by the regulator Ofgem each quarter, so the upcoming 7% reduction will apply until the end of September. The fall is attributed to lower wholesale energy prices, which rose steeply when western nations imposed sanctions on Russia following the outbreak of hostilities. The cap does not limit the size of bills, which are always determined by consumption. Instead, it sets a maximum rate per unit of energy used, along with a cap on associated standing charges, which are paid regardless of usage. Ofgem is conducting a review of the way the cap works. Critics argue that standing charges should be reduced or scrapped because they do nothing to incentivise energy saving, but the counter argument is that resulting higher unit charges would penalise many vulnerable consumers, including the sick and elderly, who use large amounts of energy. Energy prices are expected to feature prominently in the manifestos of political parties in the run-up to the General Election on 4 July. The revised July cap means: an average household paying by direct debit for a dual fuel gas and electricity tariff will pay £1,568 a year an average household paying by prepayment meter for dual fuel will pay £1,522 a year an average household paying for dual fuel by standard credit (cash or cheque) will pay £1,668 a year. The average household is said by Ofgem to use 2,700 kWh of electricity and 11,500 kWh of gas a year. Those paying by direct debit and prepayment meter pay less because of lower administration costs. The component of the cap represented by standing charges is unchanged, with reductions in gas and electricity unit prices accounting for the fall. The cap – which applies in England, Wales and Scotland (Northern Ireland has its own energy market which is not regulated by Ofgem) – was introduced by Theresa May's government in 2019, when it stood at £1,137. It rose to over £3,500 at the peak of the energy crisis, as which point the present government introduced subsidies to keep bills at around £2,100 a year. In January 2022 the cap stood at £1,277, but the following April it leapt to £1,971 following the embargo on imports of Russian natural gas. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 20 May: Households Continue To Face Affordability Challenges Domestic energy bills for typical households could fall by over £100 a year from July, according to analyst Cornwall Insight, writes Brean Horne. The energy price cap, which represents the annual cost of gas and electricity for a household with average consumption on a dual-fuel tariff and paying by direct debit or using a prepayment meter, is set each quarter by the regulator, Ofgem. It fell by 12% on 1 April to £1,690 a year thanks to lower wholesale prices, and Cornwall Insight believes it will fall a further 7% for the third quarter of the year to £1,574.37. Energy supplier EDF is forecasting the Q3 cap could fall to £1,568, again for a household with average consumption levels (2,700 kWh of electricity/11,500 kWh of gas per year). If the predictions are correct, this drop would represent a 25% decrease compared to last summer, with prices around £500 lower than July 2023. Energy prices are at their lowest level since February 2022, when Russia's invasion of Ukraine sparked a global energy crisis. However, even with July's predicted fall, they remain higher than pre-pandemic norms. Dr Craig Lowrey at Cornwall Insight said: 'We must recognise lower prices don't erase all the problems. The very fact we are still seeing bill levels which are hundreds of pounds above pre-crisis levels underscores the ongoing challenges faced by households. 'Although a reduction in the price cap could save households money, the affordability of energy bills remains a concern.' Ofgem is reviewing the way the price cap operates. This includes whether standing charges, the fixed daily amount that you pay on your bill regardless of how much energy you use, should be changed. Mr Lowrey said: 'While the cap is certainly not the ticket back to long-term energy bill affordability, Ofgem's review could pave the way for fairer, more efficient energy bills. However, given the breadth of reforms being considered by the regulator, it is worth remembering that such changes will inevitably lead to trade-offs. 'For example, reducing standing charges, while seemingly beneficial for low-energy users, could lead to higher unit prices. This could disproportionately impact those in less energy-efficient homes or with greater energy needs, some of whom could be vulnerable. Finding the right balance is crucial. 'The path forward for energy pricing remains uncertain, and with stakeholders advocating for reforms – coupled with a general election on the horizon – energy bills are likely to be an area of continued debate and transformation in the months ahead.' Switching to a fixed-rate energy deal could help households lock in a cheaper rate and save money. Shopping around and comparing deals can help reveal the best option. But you'll need to watch out for extra charges, such as early exit fees, that could affect the overall savings made if you switch to a fixed-term deal. Currently, the cheapest fixed rate deal for a typical dual fuel customer who pays via direct debit is just under £1,620 per year, putting it £45 higher than the forecast Q3 cap (based on data from Uswitch for a typical dual fuel customer paying by direct debit). The deal – EDF Essentials 1Yr Jun25 – levies a £25 per fuel exit fee, charged if you choose to switch to a different deal before the 12-month contract is up. However, under Ofgem's rules, exit fees don't apply if you switch within 49 days of your deal coming to an end. Signing up for this tariff means you agree to have a smart meter installed if you do not already have one. For more money-saving tips, read our guide on how to cut your energy bills. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 1 May: Falling Wholesale Prices Feed Through To Consumers Our energy partner, uSwitch, is offering a new 12-month fixed-rate tariff from EDF which is priced at £110 below the regulator Ofgem's energy price cap for 1 April – 30 June 2024. It's the cheapest energy-only fixed-rate tariff available on the switching site since October 2021. The price cap stands at £1,690 a year for a household using a typical amount of gas and electricity (2,700 kWh of electricity/11,500 kWh of gas per year) and paying by direct debit, putting the EDF equivalent cost at £1,580. Note, however, that the cap does not limit the size of your bill. It controls how much suppliers can charge for each unit of energy consumed, as well as associated standing charges. Actual bills are always determined by consumption. The new deal – EDF Essentials 1yr May25 – comes with a £25 per fuel exit fee. This will be levied if you decide to switch again within the 12-month term (although Ofgem rules say such fees cannot be levied within 42 days of the deal coming to an end). uSwitch points out that analyst Cornwall Insight is predicting that the price cap could fall by around 8% from £1,690 to £1,560 for the three months from July to September 2024, which may in turn trigger the release of cheaper deals than those currently available. The new EDF plan requires paperless billing and, when bought through uSwitch, is not available to existing EDF customers or to those with prepayment or pay-as-you-go meters (only standard and Economy 7 meters can access the deal). Forecasters are optimistic about prices in the near term because of falling wholesale prices, particularly for natural gas, which is used in the UK to power electricity generation. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 10 April: Steep Rise In Legal Action Over Unpaid Bills Citizens Advice has issued a warning about increasing levels of court action being taken against people who are behind on their energy bills. The number of customers the charity is helping with county court judgments (CCJs) issued on behalf of energy firms is increasing. Between 2020 and 2022 Citizens Advice saw a 30% increase in the number of people affected, but last year that number nearly doubled, jumping from 179 in 2022 to 349 in 2023. The charity is concerned this could force bill payers further into debt, since CCJs can leave people paying higher rates of interest on borrowing. Madison Stefanuik, a debt caseworker at Citizens Advice, said: 'People are coming to us about this problem more and more often. It's usually people who are struggling to make ends meet, often trying to prioritise rent and council tax. As a result, they've fallen behind on energy bills and have been hit with a CCJ. 'Since rules were tightened on prepayment meters, we've noticed some energy suppliers are increasingly using CCJs and sending in bailiffs to force customers to pay their debts. 'What's troubling is that energy debts aren't regulated by the Consumer Credit Act, meaning suppliers can go to the High Court quite quickly after a CCJ has been granted – at which point bailiffs can get involved. This is when people usually come to us for help, because they've got aggressive bailiffs knocking at the door and don't know what to do.' Dame Clare Moriarty, Citizens Advice chief executive, said: 'Getting a CCJ can be devastating. It can ruin people's finances and plunge them further into debt. That's why Ofgem must introduce new permanent protections to halt this worrying trend as soon as possible.' The latest analysis from Ofgem shows energy debt rose by £2.8 million a day in the last six months of 2023, reaching a record figure of £3.1 billion. Citizens Advice is calling for a long-term plan to tackle spiralling energy debt, including new protections for people who are in debt to their supplier. Currently, there are no rules on when it is acceptable for suppliers to use CCJs. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 4 April: Vulnerable Customers To Receive Compensation Energy suppliers are expecting to pay over £540,000 in compensation to 2,500 'vulnerable' customers who were wrongly moved onto prepayment meters, according to data from the industry watchdog Ofgem, writes Brean Horne. The regulator ordered providers to review cases where prepayment meters were involuntarily fitted between 1 January 2022 and 31 January 2023 to identify customers eligible for compensation because of their vulnerable status, as defined by Ofgem. So far, suppliers have paid £342,450 in compensation to 1,502 customers, with £200,000 to be paid to a further 1,000. Compensation levels for each customer vary depending on their circumstances and the harm they experienced. Involuntary fitting of prepayment meters is allowed where the customer is heavily in debt with their credit meter account and shows no signs of paying, unless the household is deemed vulnerable under Ofgem's definition (see below). Last year a report in The Times revealed that customers were being forced to accept a prepayment meter despite their being classed as vulnerable. As a result, involuntary installation was paused by Ofgem while an investigation took place. It restarted earlier this year, with only a limited number of suppliers allowed to carry it out. Currently, these are EDF, Octopus, Scottish Power, Tru Energy, Utilita and Utility Warehouse. The compensation figures for British Gas are not included because the energy firm – Britain's biggest, with seven million customers – is being investigated separately by Ofgem. Energy suppliers are identifying affected customers by looking at the accounts of people with known vulnerabilities, or where complaints have been made. They have also contacted all prepayment meter customers to check whether it is still a suitable way for them to pay. A spokesperson for Ofgem said: 'We are working closely with suppliers to make sure they identify all eligible consumers and pay appropriate levels of compensation promptly.' The news follows the publication of Ofgem's 'multiyear' strategy – 'Protect, Build, Change, Deliver' – which sets out how it intends to deliver 'clean, secure and fairly-priced' energy. The strategy is designed to help customers deal with the financial impact of the 2022 energy crisis, which saw debt levels reach record highs. Ofgem also aims to achieve a net zero energy system and transition from gas to renewable energy sources as part of its plans. Claiming compensation You may be eligible for compensation if your energy company wrongfully installed a prepayment meter or switched you from a smart meter to prepayment meter mode. If you think you have been affected, contact your energy supplier to explain your circumstances and make a complaint. Your supplier will investigate your case and your complaint may be referred to the Energy Ombudsman and Extra Help Unit if you need extra support. What are the prepayment meter rules? Suppliers must be approved by Ofgem and follow strict rules before they can install a prepayment meter without a customer's permission. This includes making at least 10 attempts to contact the customer about their energy bill arrears and conducting a welfare visit before the prepayment meter is installed. Under current rules, suppliers must protect vulnerable customers and are not allowed to force-fit prepayment meters in households with: residents over 75 (unless they have adequate support in the house) children under the age of two residents with severe health issues, terminal illnesses or conditions that could worsen in cold temperatures (such as chronic bronchitis, emphysema and sickle cell disease) residents needing a continuous energy supply for other health reasons (such as dependence on powered medical equipment). The list of approved suppliers is subject to change but customers can check whether a firm is authorised to force-fit a prepayment meter on Ofgem's website. If you are worried about affording your energy bills, it's important to contact your supplier as soon as possible. Our guide on how to get help with your energy bills also shares more support available to assist with keeping on top of your energy bills. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 1 April: 12% Cap Cut Thanks To Falling Wholesale Prices Today, 1 April 2024, sees the energy market's domestic bill price cap fall by 12.3%, taking it from £1,928 to £1,690. This is the amount an average household can expect to pay in a year if they have a dual fuel gas and electricity tariff and pay by direct debit or have a prepayment meter. Households using average amounts of energy should see their bills fall by around £20 a month. However, the start of April also sees hefty increases in council tax, water bills, broadband and mobile phone tariffs, and vehicle excise duty for most cars, reducing the net benefit in many instances. The energy cap, which re-sets every three months based on historic wholesale prices monitored by Ofgem, the regulator, does not limit the size of actual bills. It is a cap on how much suppliers can charge for units of gas and electricity consumed and associated standing charges. Typical consumption rates for an average household – 11,500 kWh per year of gas and 2,700 kWh per year of electricity – are used to work out the cap amount. Most people are on energy tariffs that reflect the cap's limits on the price per unit of energy and on standing charges, but there are a small number of cheaper deals where the price is fixed, usually for 12 months. You can run a quick comparison to see what is available here. These fixed-rate tariffs usually come with an exit fee if you wish to move tariff before the end of the fixed period. These start at around £50 per fuel but can be much higher, so are worth considering if you think there's a possibility you might want to switch in the near future if the cap falls further (note that exit fees cannot be charged if you are within 42 days of the tariff end date). Market analyst Cornwall Insight predicts that the price cap will fall again from £1,690 to £1,560 on 1 July before rising to £1,631 on 1 October. Its estimate for the first quarter of 2025 is £1,634, but it is generally agreed that predictions further into the future are inherently less reliable because of the vulnerability of wholesale prices to world events and weather-driven demand. In the winter of 2021-22, the price cap was below £1,300, so even with today's, it remains at an elevated level in historical terms. The regulator, Ofgem, has opened a consultation on the future of pricing regulation, having concluded that the current arrangement will not work efficiently as new tariffs emerge with variable pricing structures based on supply and demand (see story below). 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 26 March: Ofgem Consults On Future Of Price Cap Market regulator Ofgem is consulting on the future of its price cap, which limits how much suppliers can charge customers for each unit of gas and electricity they use, as well as for associated standing charges. The cap is set quarterly. At present it stands at £1,928 but from 1 April 2024 it will fall by 12.3% to £1,690. This is the amount an average household can expect to pay in a year if they have a dual fuel gas and electricity tariff and pay by direct debit. Actual bills are always determined by consumption – the cap does not limit how much you will pay. It is determined by movements in wholesale energy prices in the three months before it comes into force. Ofgem says the cap, which was introduced in 2019, has helped protect customers from the worst effects of the spike in energy prices that followed the Russian invasion of Ukraine. But critics point out that the government stepped in to limit typical bills to £2,500 a year when the cap soared above £3,000 in October 2022 and £4,200 in January 2023. The consultation, which runs until 6 May, will explore ways in which the cap might be developed 'so customers remain protected as the energy market evolves to a smarter, more flexible system.' This refers to the introduction of 'time of use' tariffs that offer electricity at different prices during the day, allowing consumers to use appliances and devices when general levels of demand are low and unit prices are cheaper. Tariffs designed to cater for the increasing number of households charging their electric cars overnight are also starting to appear. Ofgem said: 'Energy markets are changing as increasing numbers of consumers change their energy consumption and begin using electric vehicles, heat pumps and solar panels. 'Our increasingly renewables-dominated electricity sector will also reward consumers for shifting the time of their electricity consumption, which will in turn reduce costs for everyone. 'As customer diversity grows, and more households adopt time-of-use tariffs, it could become harder to retain a universal price cap that is suitable for everyone. [We are] considering how the price cap, and energy regulation as a whole, needs to adjust to ensure customers are protected, they continue to pay a fair price for their energy, and they get to realise all the benefits of net zero.' As part of consultation discussion paper, Ofgem has set out a range of options for the future of the price cap, including: introducing a more dynamic cap with time-of-use dependent unit rates to encourage consumer flexibility introducing a targeted cap which could be based on a variety of factors such as vulnerability introducing more flexible, market-based price protections such as setting a limit between a supplier's default tariff and tariffs available in the market, capping the margin suppliers are able to make, or replacing the cap with a ban on acquisition-only tariffs. Acquisition-only tariffs are deals that are only available to new customers. There is currently a temporary ban on such offers, recently extended for 12 months, which was introduced to prevent suppliers from subsidising such deals with profits from existing customers. Ofgem is also currently reviewing over 30,000 responses to its call for input on standing charges, which closed in January. Responses to the price cap consultation can be sent to future_price_protection@ by Monday 6 May 2024. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 23 February: Regulator Working On Plans To Tackle Debt Ofgem, the energy market regulator, is reducing its price cap on the cost of gas and electricity by over 12% from 1 April, a move which will knock £238 a year off typical bills, writes Kevin Pratt. The cap limits what suppliers can charge for each unit of power they supply and for associated standing charges. For an average household with a 'dual fuel' gas and electricity tariff paying by direct debit, the cap will work out at £1,690 when it is changed at the start of the next quarter. This is a 12.3% fall on the current cap of £1,928. The estimated four million customers with prepayment meters will be subject to the same level of cap, as Ofgem is permanently removing the 'premium' that has previously been added to their bills. Those who pay on receipt of their bill by cheque or cash will continue to pay around 5% more for their energy because of the administration costs involved. The cap, which is updated every quarter, does not limit the size of bills, which are always determined by consumption. The cap's assumed 'average consumption' figures are 11,500 kWh per year of gas and 2,700 kWh per year of electricity. Ofgem says the change in April will see energy prices reach their lowest level since Russia's invasion of Ukraine in February 2022, which helped push wholesale prices for gas and electricity to record levels. Domestic prices followed suit, prompting the government to intervene in October of that year with its Energy Price Guarantee. This capped bills at an average of £2,500 a year. Government payments totalling £400 were then paid to households over the winter of 2022/23 to subsidise bills further. The price cap was as low as £1,300 as recently as early 2021. Ofgem concedes that customers are struggling with the high cost of bills, pointing to record consumer energy debt levels of £3.1 billion. The new cap includes a payment of £28 per household, spread across a year, to enable suppliers to write-off unrecoverable debt. Those on prepay meters will not be charged this sum because, due to the nature of their payment method, debt levels are not as chronic as for credit meter customers. Jonathan Brearley, Ofgem's chief executive, says the regulator is working on measures to address levels of existing debt: 'We'll be stepping back to look at issues surrounding debt and affordability across the market for struggling consumers, which we'll be announcing soon. 'These steps highlight the limitations of the current system – we can only move costs around – so we welcome news that the government is opening the conversation on the future of price regulation, seeking views on how standard energy deals can be made more flexible so customers pay less if using electricity when prices are lower. 'But longer term we need to think about what more can be done for those who simply cannot afford to pay their energy bills even as prices fall. As we return to something closer to normality we have an opportunity to reset and reframe the energy market to make sure it's ready to protect customers if prices rise again.' Ofgem says it is encouraging the return of switching tariff, where customers move to a more competitive deal, by reducing the time it takes to switch to five days. It is also removing the 'market stabilisation charge', which requires companies to pay compensation to a new customer's previous supplier when they switch. However, the regulator has extended its ban on 'acquisition-only' tariffs by 12 months, a move which is being seen as a potential barrier to competition. These tariffs enable companies to offer deals exclusively to new, not existing, customers. They were banned because of fears that aggressive pricing during periods of wholesale price uncertainly could put companies' financial stability at risk if wholesale prices moved against them. Ofgem says it decided against removing the market stabilisation charge and the ban on acquisition-only tariffs because to do both simultaneously might jeopardise 'a phased and responsible return towards normality in the market.' It says it wants to prevent 'a return of the risky behaviours which contributed to the high number of supplier failures during the energy crisis.' 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 15 December: Ofgem Proposes £16 Price Cap Adjustment To Help Struggling Customers The energy price cap will incorporate a £16 'adjustment' for the year April 2024 – March 2025 if proposals put forward by the regulator to tackle bad debt are given the green light. The amount – equivalent to around £1.33 a month for credit meter billpayers – would be used by suppliers to fund a range of consumer support measures introduced by Ofgem. These took effect yesterday (14 December) having been announced on 18 October (see story below). They include helping customers who are in debt by: setting up payment plans writing off unmanageable debt on a case-by-case basis working out affordable repayment holidays. Ofgem argues that current levels of debt – estimated at £3 billion – pose a risk to supplier viability. If companies were to fail, additional costs would be heaped on consumers as the market absorbed 'orphaned' customers whose supplier had gone bust. The cost of allocating customers of around 30 failed firms during the energy crisis triggered by the war in Ukraine in February 2021 is reckoned to be around £6 billion pounds. In Ofgem's terms, 'bad debt' refers to the amount of money owed by customers across the energy market which is unlikely to be repaid. The regulator says the adjustment to the price cap is crucial to ensure that the burden of this increased debt falls as fairly as possible. It said: 'The scale of this debt means that it is crucial that suppliers have sufficient funding to ensure they can meet the strict regulations Ofgem has in place around how they treat customers facing payment difficulties. This adjustment to the price cap will ensure suppliers have the resources to support customers struggling with debt. 'Other sectors already commonly make provisions within their prices for bad debt costs. However, the regulated nature of the energy sector means that Ofgem is able to use the price cap mechanism to ensure these costs are recovered as fairly and efficiently as possible.' Under Ofgem's proposals, any extra costs added to the price cap would not be passed onto customers with prepayment meters. This reflects the fact that many of these customers do not build up the same level of debt as credit customers (who pay in arrears) because prepay meters work on a 'pay-as-you-use' consultation runs until 17 January 2024. Details, including how to respond, can be found on the Ofgem website. 1 Uswitch Compare top gas, electricity, and green energy deals Save money when switching suppliers 1 Uswitch Compare Energy On Uswitch's Website Featured Partner 23 November: Ofgem Proposes To Make Market 'Fairer' Ofgem, the energy market regulator, is increasing its price cap on domestic customer bills by 5% from 1 January 2024, effective for the first quarter of the year. The latest figures from the Office for National Statistics show inflation running at 4.6% in October. For an average household paying by direct debit for a dual fuel tariff (gas and electricity from the same supplier), this means a rise of £94 in annual bills from £1,834 to £1,928. For customers who pay by standard credit on receipt of a bill (cash or cheque), the default cap will increase by £99 from £1,959 to £2,058 for typical dual fuel consumption, while the cap for prepay customers will increased by £99 from £1,861 to £1,960, again for average dual fuel consumption. Ofgem says the increase 'is driven almost entirely by rising costs in the international wholesale energy market due to market instability and global events, particularly the conflict in Ukraine.' It says it will use 'all levers' to ensure costs are spread fairly and customers struggling with bills are supported. 'Average consumption' is deemed to be 11,500 kWh per year of gas and 2,700 kWh per year of electricity. Ofgem's cap does not put a ceiling on bills, which will always be determined by the amount of energy consumed. The price cap is updated every quarter and limits how much customers can be charged per unit of energy and in standing charges. Earlier this month, Ofgem opened a consultation into possibly replacing or overhauling standing charges, which are paid regardless of consumption and are seen by many as a disincentive to reducing consumption (this runs until 19 January – see story below for details on how you can submit your views). Ofgem boss Jonathan Brearley said: 'This is a difficult time for many people, and any increase in bills will be worrying. But this rise – around the levels we saw in August – is a result of the wholesale cost of gas and electricity rising, which needs to be reflected in the price that we all pay. 'It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills. 'We are also seeing the return of choice to the market, which is a positive sign and customers could benefit from shopping around with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap. 'People should weigh up all the information, seek independent advice from trusted sources and consider what is most important for them whether that's the lowest price or the security of a fixed deal.' Today's announcement confirms plans to remove the 'prepayment meter premium' to ensure that prepay customers are charged the same standing charge as direct debit customers. Previously, customers with prepay meters have been charged more to cover additional costs. In addition to its proposal to remove the prepay premium permanently once government subsidies are removed in April, Ofgem also wants to overhaul the way the costs of bad debt are shared among standard credit customers (those who pay on receipt of a monthly or quarterly bill for the exact amount of energy used) and those who pay by direct debit. If adopted in the round, the proposals would save pre-pay customers around £50 a year, reduce standard credit bills by around £45 a year but add around £20 a year for direct debit customers. Ofgem is keen to hear views on this proposal from all interested parties. The price cap to take effect in April will be announced in February. Analyst Cornwall Insight is predicting that the main cap will fall back to around £1,850 at that point. Compare Energy Deals With The Energy Shop Find competitive offers in your area Compare Deals 16 November: Bills Tipped To Increase From January Ofgem, the energy market regulator, wants to know what people think about standing charges, and how they might be replaced, writes Mark Hooson. Energy customers pay standing charges at a daily rate to their suppliers as part of their bills, regardless of how much gas or electricity they use. Critics say this can act as a disincentive to cutting consumption. Under the current energy price cap, customers can be charged up to 53 pence per day standing charge for electricity, and 30 pence per day for gas. A new cap will be announced in the coming days to take effect from 1 January 2024. Analyst Cornwall Insight is predicting that the energy price cap – currently £1,834 ayear for a typical household paying by direct debit – will rise by 5% to £1,931 on 1 January 2024. It says the figure will be £1,853 for the second quarter of the year, £1,824 for Q3 and £1,863 for Q4. It is forecasting a steep increase in the electricity standing charge from April – up to 61 pence per day from 53 pence – on account of a reform of network charges by Ofgem. Standing charges can be likened to line rental on a phone contract. Suppliers spend the income they generate on maintaining the infrastructure they use to deliver energy. Last month, figures from the Office for National Statistics showed around 4 in 10 adults (39%) who pay energy bills said it was 'very or somewhat difficult' to afford them. Today, 16 November, energy regulator Ofgem is asking charities, consumer groups, businesses, suppliers and bill payers for their views on standing charges, and wants ideas for what they might be replaced with. Any interested parties, including bill payers, can email their views to: StandingCharges@ by Friday 19 January, 2024. Tim Jarvis, Ofgem's director for markets, said: 'We know that standing charges have provoked a huge amount of debate in recent months and, with wider cost of living pressures meaning customers will continue to struggle with bills, now is the right time to look at this again.' Standing charges are covered by the energy price cap, which limits how high suppliers can set them, but many still see them as unfair. Standing charges vary by region, with those on Merseyside and in north Wales paying more than those in the south east of England. Energy customers on pre-pay meters have also historically paid more in standing charges than direct debit bill payers. Pre-pay customers are currently subsidised through the government's Energy Price Guarantee, but that support is due to end in March 2024. Ofgem says it is working on a replacement for the scheme. While most suppliers do levy standing charges, they're not obliged to. The few that don't have standing charges, such as Utilita, instead add the cost to the unit prices of the energy they supply. On the one hand this means customers only pay for what they use, but higher unit costs might disadvantage customers who cannot reduce their energy consumption, such as those with disabilities, the elderly and those dependent on medical equipment. Mr Jarvis said: 'It's a complex issue and, while an upfront set fee to cover a supplier's fixed costs works for some, it doesn't work for others. Equally, spreading the costs differently might help some, but our previous analysis has found it can also penalise some really vulnerable households. 'However we proceed, there is a difficult balance to be struck, which is why it is important that as many people as possible respond to our call for input with their experiences of it, how it affects them and what the alternatives could be.' Ofgem analysis found that, while moving to a charge related to how much energy customers use would benefit low-income households overall, there could be a significant number of customers made worse off. Its case studies show that around 1.2 million low-income, high-usage households with electric heating would be worse off by roughly twice as much as those who would benefit. Compare Energy Deals With The Energy Shop Find competitive offers in your area Compare Deals 2 November: UK Remains Vulnerable To Supply Disruption Energy bills will rise next year, according to analyst Cornwall Insight's forecasts for the regulator's price cap, writes Candiece Cyrus. The cap, which limits the amount suppliers can charge their customers in standing charges and for each unit of gas and electricity they use, is set quarterly by Ofgem, based on wholesale energy prices. Cornwall Insight predicts the cap, which is adjusted quarterly, will rise in January from its current level of £1,834 a year to £1,923 a year (figures are for an average energy consumption household on a dual fuel tariff paying by direct debit). This is steeper than the rise to £1,898 a year it predicted in September. The analyst forecasts that the cap will rise to £1,929 a year in April, fall to around £1,880 in July and rise again to around £1,917 in October, keeping it above its current level throughout 2024. In September, the analyst predicted the cap would fall below its current level from April next year to £1,820, then £1,781 in July before rising to around £1,825 in the fourth quarter. Cornwall Insight's new forecasts take into consideration volatility in the market caused by the Israel-Hamas conflict, industrial action at liquid natural gas facilities in Australia and damage to Finland's Balticconnector gas pipeline. Similar to Russia's invasion of Ukraine, these events highlight the potential threat of disruption to the UK's energy supply, particularly this winter, as temperatures drop. The National Grid ESO confirmed earlier this year that it would offer the Demand Flexibility Service this winter, offering households and businesses with smart meters the opportunity to earn discounts on their electricity bills by using less energy during peak usage hours. The service is only used when there is a threat of energy demand outstripping supply. Dr Craig Lowrey, principal consultant at Cornwall Insight, said: 'The jump in price cap predictions since September has once again highlighted the vulnerability of UK energy prices – and customer bills – to geopolitical events. 'The Russian invasion of Ukraine demonstrated there is a delicate balance in the global energy market which can easily be disrupted by unexpected events, and it looks as though the current situation is repeating that pattern. 'The government needs to take steps to proactively limit the impact that such situations have on the UK's energy market, and already stretched households, rather than reacting to events as they occur. Stop-gap measures such as social tariffs and one-off payments are helpful, but they are not a long-term solution. 'While the UK will never be entirely protected from global price increases, reducing the country's reliance on imported energy and prioritising sustainable, domestically sourced energy will help protect the country from international energy shocks, and work to stabilise prices over the next decade.' Compare Energy Deals With The Energy Shop Find competitive offers in your area Compare Deals 1 November: Final Amount Hinges On Success Of Octopus Energy customers could see almost £3 billion added to their bills to cover the cost of protecting consumers when their suppliers went bust during the energy crisis in 2021, writes Candiece Cyrus. The House of Commons Public Accounts Committee says around £2.7 billion of taxpayer money was used to cover the cost of transferring customers of 28 failed firms, with the expectation being that this will be recouped through energy bills. But the Committee says this figure could rise to over £2.9 billion once the cost of rescuing 1.5 million customers of the largest corporate failure, Bulb, are taken into account. The Bulb case alone cost taxpayers a total of £3.206 billion, and the government is only expected to recoup £2.96 billion from Octopus, which acquired Bulb's customers – and that figure is dependent on Octopus's commercial success. The Committee fears the estimated £246 million shortfall may be borne by bill-payers at a time when household budgets are already stretched by the cost of living crisis. The Committee added that some households that need support with their bills are not receiving it, saying only 76% of credit vouchers that were issued to households on prepayment plans last winter have been redeemed. Some energy customers have reported not receiving their vouchers. Dame Meg Hillier MP, chair of the Committee, said: 'Our report is a sobering reminder that we are still living with the fallout of the failure of so many energy suppliers in 2021-22. While the Government and regulators did the right thing in moving swiftly to protect consumers, the uncomfortable truth remains that the recovery of that investment hangs on the commercial success of one company. The public can ill afford such uncertainty, particularly in challenging economic times.' An Ofgem spokesperson said: 'Protecting consumers is our top priority and we worked tirelessly with government to put measures in place to shield customers from the impact of Bulb going out of business. Since then, we have taken a range of firm steps to strengthen the resilience of the sector to reduce the risk of future supplier failures and to limit the impact on consumers if they do fail. 'We can and do decline licence applications by new energy companies where we are not convinced the organisation is resilient enough to weather the volatility of the current energy market. We also require organisations to assess their management control frameworks and provide assurance to Ofgem.' Compare Energy Deals With The Energy Shop Find competitive offers in your area Compare Deals 18 October: Firms Told To Publish Customer Reviews Energy suppliers are to be required by Ofgem, the market regulator, to contact customers if they miss two monthly payments or one quarterly payment, to check if they are struggling financially and, if so, to offer support. This could be via an affordable payment plan or repayment holiday, writes Candiece Cyrus. Additionally, suppliers will need to be available via multiple contact methods (such as telephone as well as email or via the website), prioritise enquiries from the vulnerable, such as the elderly and the disabled, and offer free contact methods (such as a freefone number) for those struggling to pay their bills. They will also be required to publish Citizens Advice customer service ratings on their websites to enable households to make informed decisions when switching. The ratings are updated quarterly and cover factors such as call waiting times, email response times, bill accuracy and complaints data. The obligations, effective 14 December, are part of a bid by regulator Ofgem to improve standards. They are the outcome of a consultation between Ofgem, customers, suppliers, consumer groups and charities, conducted in May. Jonathan Brearley, head of Ofgem, said: 'With recent global events increasing pressure on gas prices, it's likely that bills will rise further. This is why the industry needs to do all it can to ensure good customer services and provide help with managing debt, especially for the most vulnerable. 'In the last year, we have seen some good examples of suppliers stepping up their support for customers. However, despite this, the feeling of those on the frontline working with vulnerable households is that more still needs to be done. 'Long wait times to speak to someone on the phone. Letters not replied to. Lack of empathy for people's personal circumstances. This needs to change and today we are setting out our expectations of suppliers this winter, and how they will be held to account to ensure consumers can get hold of them more easily. In particular for vulnerable customers, we expect more proactivity and a more sympathetic response.' Energy UK, which represents suppliers, has aligned with Ofgem and Citizens Advice to develop its Winter 2023 Voluntary Debt Commitment, outlining ways the participating 14 suppliers should support customers (see update below). However, Ofgem also proposed a temporary increase to energy bills from April 2024 to prevent suppliers from going bust, as customer debt hit £2.6 billion in the summer (see update below). Compare Energy Deals With The Energy Shop Find competitive offers in your area Compare Deals 12 October: Bills Would Rise £1.50 A Month For Q2 2024 Households may face a one-off rise in their energy bills of up to £17 a year to prevent suppliers from going bust, writes Candiece Cyrus. Regulator Ofgem has proposed the move as part of a consultation on ways to protect suppliers from going bust because of customer debt, which reached £2.6 billion this summer, its highest recorded level. In 2021, around 30 suppliers folded when they were unable to pass rising wholesale costs on to customers quickly enough. The cost of administering the transfer of their customers to other firms and maintaining energy supplies added £82 to every household's energy bills. The crisis also prompted Ofgem to move to quarterly rather than six-monthly adjustments to the cap, making it more responsive to wholesale price movements. The temporary rise would be applied with next April's price cap and last for three months, adding around £1.50 to the average household's bills per month (equivalent to £17 a year). The cap dictates the maximum amount suppliers can charge households per unit of energy, and in standing charges. Such adjustments to the cap are permitted under its terms to allow suppliers to recoup otherwise unrecoverable debt. The cap fell from £2,074 in the last quarter to its current level for Q4 2023 of £1,834 a year for a typical consumption household, based on Ofgem's revised lower average usage figures which it will refer to from this month, October. Based on its old figures, the cap would be £1,923 a year for a typical household. The cap is expected to rise again in January 2024 to £1,898 a year and fall to £1,820 in April, according to analyst Cornwall Insight. Unaffordable energy bills led to charities, campaigners and MPs sending an open letter to the government last month to urge it to fulfill its pledge to introduce a subsidised 'social' tariff for low-income households (see update below). Tim Jarvis, director general for markets at Ofgem, said: 'We know that households across the country are struggling with wider cost of living challenges, including energy, so any decision to add costs to the price cap is not one we take lightly. 'However, the scale of unrecoverable debt and the potential risk of suppliers leaving the market or going bust, which passes on even greater costs to households, means we must look at all the regulatory options available to us.' Dame Clare Moriarty, chief executive of charity Citizens Advice, said: 'Even before winter hits we're helping more people who can't keep up with their energy bills than ever before. Worryingly, more households are running up energy debts during the warmer months, with some having to borrow money to try and keep the lights on. 'High energy prices mean millions of people remain at risk of falling behind in the coming months. An increase in the price cap to pay for higher debts will make people's bills even more unaffordable. Any change must be in the best interest of all consumers. 'For now, the government must provide additional bill support this winter for those at most risk.' Energy UK, which represents suppliers, has also published the Winter 2023 Voluntary Debt Commitment, developed with Citizens Advice and Ofgem. It sets out the steps 14 participating suppliers will take to provide support such as: offering financial support to customers in the form of debt write-off schemes, hardship funds and reducing or waiving standing charges for certain customers proactively identify struggling customers and setting up partnerships with appropriate charities to provide additional advice training staff to ensure accurate billing encouraging customers to contact them to disclose vulnerabilities i.e. being elderly, living with young children improving energy efficiency in homes. The firms involved are British Gas, E, Ecotricity, EDF Energy, Next, Good Energy, Octopus, Ovo, Rebel Energy, Shell Energy Retail Limited, Scottish Power, So Energy, Utilita and Utility Warehouse. Compare Energy Deals With The Energy Shop Find competitive offers in your area Compare Deals 30 September: Prices Remain Close To Historic Highs With the energy market price cap set to change on Sunday, an open letter signed by 140 charities, campaigners and MPs is urging the government to fulfill its pledge to protect low-income households against volatile energy prices by
Times
23-05-2025
- Business
- Times
UK energy price cap: bills to fall by £129 from July
Energy prices for most households in Britain will fall by 7 per cent from July, cutting a typical annual bill to £1,720. Ofgem, the energy regulator, said that the price cap limiting standard gas and electricity tariffs would fall by £129 a year for an average household, following reductions in wholesale prices. Worries about the health of the global economy after President Trump's tariff onslaught and the warm sunny spring weather have contributed to a decline in gas prices in recent months, despite a slight uptick so far this month. The fall in the energy price cap from July will reverse an increase of 6.4 per cent or £111 a year that came into effect in April, taking bills to £1,849 a year
Irish Times
22-05-2025
- Business
- Irish Times
Wholesale electricity prices surged 26% in year to April, says CSO
Irish wholesale electricity prices were more than a quarter higher in April than they were last year, the Central Statistics Office (CSO) said on Thursday, amid a wider spike in European energy prices in the early part of 2025. The statistics agency's latest wholesale price index, which tracks the prices that retailers pay for goods before selling them on to consumers or businesses, declined 1.4 per cent between March and April and was down 3.6 per cent over 12 months. Meanwhile, wholesale electricity prices – the prices paid by energy retailers on global markets before they sell to households – were down 15.7 per cent in the month in line with seasonal factors. On an annual basis, however, wholesale electricity prices have soared by 25.6 per cent, the CSO said. READ MORE While they remain some 71 per cent lower than in 2022 at the height of the energy crisis after Russia invaded Ukraine, electricity prices have skyrocketed this year across Europe in line with a spike in natural gas prices. This has been largely due to the halting of Russian gas deliveries across Ukraine in January and low levels of natural gas storage across Europe due to cold weather this winter. [ Electricity prices dip in March but are 52% higher than a year ago Opens in new window ] Higher wholesale energy prices have not yet been passed on to consumers in the Republic in full, according to separate CSO data published earlier this month. In its latest consumer price index, the agency said household electricity prices rose just 1.3 per cent in the 12 months to the end of April and were also up 1.3 per cent in the month compared with March. Meanwhile, the CSO said on Thursday that factory gate prices for construction increased marginally in April from March and were up 1 per cent over the 12 months. When industry wages are included, wholesale construction prices were 2 per cent higher in April compared with the same month last year. There were notable increases in the wholesale price of foodstuffs, including dairy products, which climbed 22 per cent in the year to April and meat products prices, which were up 7.3 per cent.
BreakingNews.ie
22-05-2025
- Business
- BreakingNews.ie
Electricity prices rise by over 25% in last year -CSO
Figures from the Central Statistics Office show wholesale electricity prices have risen by 25.6 per cent in the last year. Prices dropped 15.7 per cent compared to April's levels, and current prices are 71.3 per cent lower than the peak in August 2022. Advertisement Producer prices for food products increased by 5.1 per cent in the 12 months to April 2025, while the Food Products, Beverages & Tobacco Index was up by four per cent. Notable increases were seen in dairy products, which increased by 22 per cent, meat products increased by 7.3 per cent, while there was a 17.4 per cent increase in chemical products. Other increases included a 3.1 per cent increase in machinery and equipment, a 3.3 per cent increase in beverages and 3.1 per cent increase in plastic products. Wholesale prices for construction products grew by 0.2 per cent in the month to April 2025 and rose by one per cent in the 12 months since April 2024.
