Martin Lewis urges viewers to ‘check and switch’ energy bills
Energy consultants Cornwall Insight believe millions of customers may have to find an extra £87 a year. Their analysts said Ofgem’s usual formula for calculations could result in a £66-a-year increase for a typical household. This is due primarily to higher wholesale costs.
Another £21 a year could be added if Ofgem presses ahead with plans to let energy giants claw back compensation for the increase in unpaid bills due to the pandemic.
That would mean an increase of just over eight per cent to the level of the cap, taking it to £1,129 a year.
The price cap for those on default tariffs was introduced in 2019 to prevent suppliers ripping off households that did not switch every year.
Ofgem updates the level of the cap twice a year to reflect changes in underlying costs, such as wholesale prices. The next update, in early February, will set the level for April to September.
The cap forced most suppliers to significantly reduce their standard tariffs and is estimated to save customers about £1billion a year.
We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Cornwall Insight said the forecast rise had been mitigated by the removal of a one-off £15-a-year charge.
That was included in the cap to compensate suppliers after a court ruled that the cap had been set too low when it was first introduced.
An Ofgem spokeswoman confirmed that a significant increase from April was possible.
She said: “We anticipate that wholesale prices will lead to the cap being set at a similar level to previous summers.”
Source: Read Full Article