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Ofgem to cap pre-paid meter charges

  • 03/08/2016
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The energy watchdog Ofgem has announced that it will impose a cap on pre-payment meters to protect customers from being overcharged

Older lady with thermostat

The energy watchdog Ofgem has announced that it will impose a cap on pre-payment meters to protect customers from being overcharged.

Ofgem say the cap, coming into effect in April 2017, will save four million households around £75 per year. Energy companies will be forced to share data to help rival companies to offer consumers better deals and Ofgem will pilot a database allowing suppliers to offer customers better value deals.

The regulator will also continue its campaigns urging consumers to shop around, including a trial of "more effective" prompts on bills urging households to check they are getting the best deal.

Today's announcement follows a two-year investigation into the energy markets by the Competition and Markets Authority (CMA). It found that two-thirds of customers don't shop around - and therefore pay higher rates than those who do regularly change suppliers. Ofgem said the changes would create a "more competitive and fairer energy market for all consumers".

However, critics have said it is impractical for most people to check every few weeks whether they were getting the best possible deal.

No Cold Homes

Our No Cold Homes campaign research last year found that one in two low income households are struggling to afford their energy costs, despite being in work. Worryingly, of those households struggling with energy costs, nearly half (48%) had done so for more than a year.

As part of the campaign, we highlighted the lack of awareness amongst the public of the schemes energy companies have to help their vulnerable customers. Of those who were struggling to pay their energy costs, only 12% had told their energy supplier about their situation and only 5% had turned to an advice organisation for help. A huge 83% are unaware that some energy suppliers have charitable trusts set up to help certain customers.

Comment from Turn2us

Kathie Clark, who leads Turn2us’ vulnerable customer work, commented: “We welcome anything that draws attention to this problem. So often, the help that people need is already there. Even though we are several months away from winter, we’d encourage people to prepare as early as possible by contacting their energy supplier and learning about the help they provide. Similarly, we’d also encourage anyone who has a friend, relative or neighbour who might be eligible for help to make sure that they are getting that assistance.

"The number of excess winter deaths is shocking, especially as help with essential bills exists but people either don’t know about it or find the prospect of approaching their service provider just too off-putting.”

Help with energy costs

If you are struggling financially, use our free Benefits Calculator to make sure you are claiming everything you are entitled to. There is also our Grants Search, featuring almost 3,000 charitable funds listed with information on eligibility based on background, personal circumstances and needs. This includes energy company grant-giving funds and social tariff schemes, including British Gas Energy Trust.

You may also find it helpful to read our Energy Schemes our Grants and subsidies for Energy Efficiency information and our information on Winter Fuel Payments and Cold Weather Payments.

The Your Situation section on our website contains information resources on benefits and grants depending on your specific situation and a Find an Adviser tool to help you find face-to-face advice in your local area.

Source: ITV News article: Energy watchdog says it will cap meter charges

 

 

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