The energy price cap is a set maximum price that energy suppliers can charge consumers for each kilowatt hour of energy they use. How much you pay depends on how much energy is used.
The Government’s Energy Price Guarantee, which sets the average annual household bill at around £2,500 is due to rise in April to £3,000, meaning that a 20% price hike in energy charges is round the corner.
The Government’s Energy Price Guarantee is designed to protect consumers from wholesale energy price increases. It is based on a typical household using a typical amount of gas and electricity. The Energy Price Guarantee is set to last until April 2024.
Ofgem chief executive Jonathan Brearley said: “Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the Energy Price Guarantee. This means that on current policy, bills will rise again in April.
“I know that for many households this news will be deeply concerning.”
Dan White policy and campaigns officer at DR UK and one of the leads at the Disability Poverty Campaign Group said: “Ofgem’s announcement is basically telling us that the price of energy will soar in April yet again. This comes at the same time as the Government contribution of £400 to our energy bills comes to an end.
We need the Chancellor to take urgent action in the Budget Statement to retain the Energy Price Guarantee at its current level. We also need swift progress in formulating and implementing a social tariff for energy that protects the poorest consumers and additional financial support for Disabled people who use energy for reasons of health and independence.”
DR UK are one over 80 charities and organisations that have signed the letter from Martin Lewis calling on the Chancellor to keep the energy price guarantee (EPG) at a typical £2,500 a year.