Tag: energy regulator Ofgem

Taking us for April Fools? Energy price cap to rise by 6.4% from 1st April

HOUSEHOLDS FACE MORE MISERY WITH YET ANOTHER ENERGY PRICE HIKE

Energy regulator Ofgem has today [Tuesday 25 February 2025] announced a 6.4% increase of the energy price cap for the period covering April to June 2025.  

A recent spike in wholesale prices is the main driver of today’s price rise, accounting for around 78% of the total increase. A small increase in policy costs and associated inflationary pressures make up a further 22%.

The price cap – which sets a maximum rate per unit and standing charge that can be billed to customers for their energy use – will rise by £111 for an average household per year, or around £9.25 a month, over the three-month period of the price cap.

For an average household paying by Direct Debit for dual fuel this equates to £1,849 per year. This is 9.4% (£159) higher than this time last year (£1,690) but £531 (22%) lower than at the height of the energy crisis at the start of 2023, when the Energy Price Guarantee was in place.

Since Ofgem’s last price cap announcement in November 2024, four million customers have moved to a fixed tariff. Now, 11 million people are on a fixed deal and won’t be affected by the change in the price cap. This is the largest movement of customers coming off the price cap and on to a fixed deal since the energy crisis.

Jonathan Brearley, CEO of Ofgem, says: “We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households.

“But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, homegrown system.

“Energy debts that began during the energy crisis have reached record levels and without intervention will continue to grow. This puts families under huge stress and increases costs for all customers. We’re developing plans that could give households with unmanageable debt the clean slate they need to move forward.

“We welcome the government’s support for these plans, and their plans to expand the Warm Home Discount, which will also offer financial help to nearly three million more households that need it most.

“If anyone is worried about paying their bills, I would urge them to reach out to their supplier to make sure they’re getting all the help they can. Where possible, switching or fixing tariffs now could also help to bring costs down and provide certainty over coming payments.”

From 1 April, Britain’s standing charges will reduce for most households, but some regional variation remains. As a result, some households will see a small increase in standing charges of up to £20 per year for a typical dual fuel consumer. This is due to changes in network costs – the price paid to transport energy around the country and power Britain’s homes.

Ofgem is also today welcoming the government’s support of its plans to tackle the growing impacts of rising debt in the energy system and create lasting change in the way debt is managed and customers in debt are supported.

The plans could see a Debt Relief Scheme established, which suppliers would use to either write off debt that is so significant it will never be paid back or help pay off debt by ‘debt matching’ customer payments.

The Debt Relief Scheme would form part of a wider package of measures, supported by the Government’s proposed expansion of the WHD, which aims to reduce debt to levels seen before the energy crisis reducing costs to all consumers by £25-30 per year*.

The regulator has also set out ambitions to improve the standard of service from suppliers when supporting customers that are struggling to pay their bills. The proposals would make it easier for consumers to get help from charities and debt support agencies and ensure a consistent approach is taken across the board, to help to limit the risk of unsustainable levels of debt building up in the future once again.

The plans have also received backing from a number of stakeholders, who recognise how important the scheme could be for helping those in severe payment difficulty to get back on track, while also encouraging more onto repayment plans, driving down debt costs for all.

The regulator continues to encourage customers to look for the best deal to help keep their household bills down and to consider switching to a new supplier or fixing to a tariff with their existing supplier. 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.

Backbench Labour MP Richard Burgon said: The so-called energy regulator Ofgem says energy bills from April will rise by 6.4%. The Government must step in and impose a real price cap and tax energy profits more to provide extra help to people.

“And to end this rip off, we must bring energy back into public ownership.”

Energy regulator launches urgent investigation into British Gas forced prepayment meter installations

An Ofgem spokesperson said: “These are extremely serious allegations from The Times. We are launching an urgent investigation into British Gas and we won’t hesitate to take firm enforcement action.

“It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.

“We have launched a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences driving it.

“We are clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable. The energy crisis is no excuse for unacceptable behaviour towards any customer, particularly those in vulnerable circumstances.”

FORCE-FITTING payment meters in the home of vulnerable people is “shocking” and unnecessary, according to a leading energy expert.

Energy UK’s former CEO Angela Knight was commenting on the results of an investigation by the Times newspaper which found that British Gas was forcing people to have pre-payment meters.

It found that debt collectors working for the firm were breaking into people’s homes to fit the meters.

Ms Knight told GB News: “I do think it’s a shocking story and I think it’s a wake up call not just to [British Gas owner] Centrica, but to all the energy companies.

“Firstly, there are people who say, I’m not going to pay, they can afford to pay, but they won’t pay…

“That’s what this process is supposed to be for, the process being that the energy company applies to the court for a court order in order to put in a pre-paid meter.

“So the individuals who say they won’t pay, but as I say, they can afford to, they are getting a pre-paid meter, so they’re not cut off.”

In a discussion with Bev Turner, she said: “But then, you’ve got a lot of people who fit into that vulnerable category and that’s people like the elderly, or people who are disabled, it’s those with very young children.

“And if they have hit a difficulty with being able to pay for their energy, and a lot of people are finding it difficult at the moment, then a pre-paid meter is not the answer. 

“They need to have an arrangement with their energy company and importantly, the energy company has a responsibility to find out first if somebody who isn’t paying falls into one of those special categories, and vulnerable categories.

“And if they do, then they shouldn’t be applying to the courts, what they should be doing is making another arrangement.”

Ms Knight added: “Now what Centrica said is they’ve stopped all of their applications right now and good on them.

“Clearly, they’re going to have to sort out the vulnerable from the not vulnerable, but they have not got a few months to do it, and then they can refresh how they approach this problem.

“And I think that what The Times’ sting has done, and what the Centrica announcement means, is that all other energy companies pay exactly the same amount of attention first, before applying for that court order.”

Commenting on the decision by Ofgem, which has ordered British Gas to stop force-fitting prepayment meters, the National Association of Property Buyers said:  “The sorry story of utility providers that was uncovered by The Times newspaper investigation highlights the potential injustices faced by many people in financial difficulty. 

“The NAPB welcomes the  fact that the company concerned has held their hands up and that Ofgem will be taking action to address the issue.

Spokesman Jonathan Rolande continued: “There is still a question to answer though. How, as a society do we deal with a situation where a householder has missed numerous payments and received letters and calls offering help, all to no avail?

“With heat, light and water being such basic human essentials, at what point are the companies allowed to disconnect? If allowed to continue unchallenged the lost revenue would inevitably be passed on to other paying customers – would that be fair? The providers are companies, should they carry the cost of unpaid bills alone?

“But the case in favour of the utility providers is seriously undermined by the huge profits made and massive salaries paid to executives – their pay is often counted in millions and there is no public sympathy for their cause.

“For now it is a relief that the intrusive practises of forced or tricked entry will be gone, but there are business and moral dilemmas for the companies, government and the public that will need to be addressed to ensure that the burden of unpaid bills doesn’t fall on those who are struggling but paying.”

Fuel poverty charity reveals 45 people per day die from cold homes

  • Last month, ONS releases figures showing 13,400 more deaths occurred in the winter period (December 2021 to March 2022) compared with the average of the non-winter months. 
  • Fuel poverty charity National Energy Action says that based on modelling by the World Health Organisation, cold homes caused 4,020 excess winter deaths last year in England and Wales. That’s 45 people per day in winter months. 
  • Despite the new figures being the second lowest for decades, the charity warns they only cover last winter, when energy bills were half the amount that they are now. 
  • The report coincides with the full publication of National Energy Action’s Fuel Poverty Monitor, which finds that households that have a low income and have a medical condition or use powered medical equipment at home are most at risk of the worst impacts of living in a cold home. 
  • They say these households have not been provided with adequate support during the Energy Crisis and are fearful next year’s winter mortality figures will be much worse.

The Office of National Statistics (ONS) has released figures showing there were 13,400 more deaths in England and Wales in the winter period (December 2021 to March 2022) compared with the average of the non-winter months.

Fuel poverty charity National Energy Action has said that up to 4,020 of these deaths were preventable and were caused by the impact of cold homes. That’s 45 people dying per day in the winter months last year – 42 in England and three in Wales. However, because of the time lag of the data, the true picture for this winter is likely to be much worse.

Last October 4.5 million UK homes were in fuel poverty, according to the charity’s figures, now – even with Government support, it’s 6.7 million UK households. The average annual bill has almost doubled in a year – from £1,271 to £2,500. The charity warns this means next year’s ONS figures are likely to be much worse.

Adam Scorer, chief executive of National Energy Action (NEA), said: “Every year we see the consequences of failing to keep the most vulnerable people safe and warm during the coldest, winter months.

“Today’s figures show a significant drop in premature winter deaths, partly because of a higher number of deaths outside winter months, but it’s still 45 people per day in the winter months. The truth is that we should not accept any death directly caused by a cold, unsafe home.

“Next year, these statistics will expose the full impact of today’s energy crisis. The toxic combination of extraordinary heating costs, stagnant or falling incomes, and our notoriously poor, unhealthy housing stock will take a heavier toll with lives blighted by debt, ill health, and worse.  

“Milder weather may not save us, or thousands of vulnerable households this winter. We must do all we can now to prevent a public health emergency and further needless deaths. Fuel poverty needs long term solutions, but this winter we need the UK Government to give more support and stop millions falling through the cracks with the most awful consequences.”

The ONS figures cover the same period as National Energy Action’s Fuel Poverty Monitor, which is released in full on Thursday 19 January. The Executive Summary was released on Tuesday 17 January.

The Fuel Poverty Monitor shows that households falling into multiple intersecting categories of vulnerability are being disproportionately affected by the Energy Crisis.

While all low-income households are feeling a significant strain during the crisis, impacts go beyond those receiving means-tested benefits, and are felt most acutely by those households that have intersecting categories of vulnerability. These households are not caught by traditional identification measures and new ways of finding vulnerable households are required.

In particular, those households that have both a low income and have a medical condition or in need of powered medical equipment at home are most at risk of the worst impacts of living in a cold home. They have not been provided with adequate support.

Previous research has consistently demonstrated the links between cold homes and health conditions, especially musculoskeletal, cardiovascular, and respiratory conditions, as well as conditions related to mental ill health.

And, a recent systematic review of evidence from across the globe concluded that fuel poverty is associated with “poorer general health, poorer mental health, poorer respiratory health, more and worse controlled chronic conditions, higher mortality, higher use of health services and higher exposure to health risks, with worse results for vulnerable groups across dimensions of inequality.”

Moreover, cold homes are linked to the development and/or exacerbation of cold-related illnesses, especially in winter, and contribute directly to excess winter deaths, hospitalisations, and wider pressure on health and social care services.