Ofgem cap to save energy customers ˆ80 a year

Energy regulator Ofgem has announced a temporary cap on prepayment meters that it says will save four million households around ˆ80 a year.

The announcement follows a two-year investigation into the energy market by the UK's competition watchdog which found the Big Six suppliers were overcharging customers by up to ˆ1.4bn a year.

Ofgem said the cap, which will apply from April, would help households who pay in advance for their gas and electricity - who it said were among the least able to benefit from competition.

The latest announcement confirms proposals set out last summer.

Ofgem said the levels of the cap would vary for electricity and gas, by meter type and region.

It said many prepayment customers were likely to see reductions in their gas bills of around 10-15%.

Customers who use electricity to heat their homes would see similar falls, the regulator said.

It added that there was less competition among suppliers for prepayment customers meaning they had fewer tariffs available and that they were generally more expensive.

Ofgem chief executive Dermot Nolan said: "We want all consumers to enjoy the benefits of a more competitive energy market, regardless of their circumstances.

"Customers who prepay for their energy are denied the best deals on the market available to those using other payment methods.

"They are also more likely to be in vulnerable circumstances, including fuel poverty.

"This temporary cap will protect these households as we work to deliver a more competitive, fairer and smarter market for all consumers."

Last week, Ofgem demanded an explanation from supplier npower after it announced it was putting up prices for standard tariff energy customers by 10%.



Add Comment

all comments

  Other news

more
Mike Grimshaw death: Teenager released on bail

Mike Grimshaw death: Teenager released on bail..

22-Jul, 09:10

A 16-year-old boy arrested on suspicion of murdering a young father has...

Made In Chelsea's Hugo Taylor exclusively opens up about life in London with Millie Mackintosh after revealing plans to run for Mayor

Made In Chelsea's Hugo Taylor exclusively opens up about life in London with Millie Mackintosh..

22-Jul, 11:21

The Chelsea-born star has been dating his former Made In Chelsea co-star...

The unraveling of Jane Sanders' Burlington College legacy

The unraveling of Jane Sanders' Burlington College legacy..

22-Jul, 20:14

Buy PhotoBurlington College President Jane Sanders in the headquarters of...

Donald Trump attacks 'illegal' report on Sessions Russian meeting

Donald Trump attacks 'illegal' report on Sessions Russian meeting..

22-Jul, 11:40

US President Donald Trump has attacked "illegal leaks" following reports...

Michigan to offer prize in fight against invasive Asian carp

Michigan to offer prize in fight against invasive Asian carp..

05-Mar, 10:38

Michigan is turning to the public for help fighting Asian carp. The...

Congressman allegedly handcuffed at ICE office

Congressman allegedly handcuffed at ICE office..

14-Mar, 19:38

A U.S. congressman said he was briefly handcuffed after refusing to leave...

McCain's brain tumor is particularly aggressive type

McCain's brain tumor is particularly aggressive type..

19-Jul, 23:50

Sen. John McCain's tumor is one of the most aggressive forms of brain...

Don't bother me, or else, Steve Harvey warns his staffers

Don't bother me, or else, Steve Harvey warns his staffers..

12-May, 09:48

Steve Harvey wants to be alone. So don't be knocking on his dressing room...