Energy price cap falls by a quarter – but our bills are up by a fifth
Ofgem has announced that the energy price cap would have been £3,280 from April – down £999 or 23% from the current cap of £4,279. In reality, the energy price guarantee means we’re currently paying £2,500 – and from April this will rise by a fifth to £3,000. In July, the cap is expected to fall below the guarantee – so our bills should fall.
Sarah Coles, head of personal finance, Hargreaves Lansdown said: “The energy price cap has plummeted a massive £999, revealing that the energy price guarantee isn’t going to be anywhere near as expensive as was originally feared. This provides the government with an opportunity to consider more tailored support in the Budget.
“It’s going to feel particularly unfair in April when the energy price guarantee jumps by a fifth, to £3,000 – at a time when the wholesale price of gas is on the way down. To make matters worse, the ending of the universal monthly support payments at the same time, will mean there’s even less cash to go around.
“Already almost half of us (47%) are finding it difficult to pay our energy bills, and 6% of people have fallen behind. In January around 9,500 people approached Citizens Advice for help with fuel debts – a number that has doubled in three years. A fifth of people asking the charity for help with debt are behind on fuel bills – making it the most common form of debt problem. Hiking prices in April is going to make life even more impossible for those who are already struggling.
“The falling wholesale price of energy offers an opportunity for the government to consider more help, particularly targeted at those who need it the most. One sensible option would be to introduce a social tariff for those on lower incomes, which charities have been pushing for. Given that this could take some time to introduce, the government could continue making monthly payments to those on lower incomes in the interim.”