Electricity pylon

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PA

A worth cap on vitality payments could possibly be prolonged to many extra households on low incomes, beneath plans being thought of by regulator Ofgem.

A restrict on the price of gasoline and electrical energy for these on pre-payment meters already saves about 4 million individuals £80 a 12 months.

This could possibly be prolonged to others on sure advantages.

The proposals come after a a lot wider cap within the Conservative manifesto was absent from the Queen’s Speech.

As a substitute, the federal government mentioned ministers had been “contemplating one of the best ways” to guard these on the poorest-value tariffs.

Enterprise Secretary Greg Clark wrote to Ofgem to problem the regulator to make use of its current powers to cut back payments.

The announcement from Ofgem lists a spread of proposals protecting billing and switching.

Final 12 months, a landmark investigation by the Competitors and Markets Authority concluded that many households on normal variable tariffs had been paying an excessive amount of for his or her vitality.

It calculated shoppers had been overpaying by as much as £1.2bn a 12 months.

This led to a cap – set regionally – on the price of vitality for these on pre-payments meters.

5 of the “massive six” vitality suppliers raised costs for different prospects earlier this 12 months, regardless of strain not to take action. Ofgem mentioned such rises weren’t justified.

The Conservative manifesto advised the vitality market was not working for shoppers and, in a widely-debated transfer, advised a tariff cap to guard 17 million individuals paying normal charges. This might have saved them as much as £100 a 12 months.

Nevertheless, after the election, new laws required for the cap was lacking from its plans for the following two years.

As a substitute, it put the ball again in Ofgem’s courtroom.

Now the regulator has mentioned it should maintain a summit in July with client teams on the way it may prolong the pre-payment meter cap to different households.

Residents Recommendation has already advised that two million further households which obtain the Heat Houses Low cost ought to get the identical safety, together with some pensioners and households with younger youngsters.

Different Ofgem proposals embrace:

  • A trial that may permit households to enter solely their postcode and present provider right into a “digital deal checker” to view the most cost effective tariff
  • Requiring suppliers to tell prospects of cheaper offers with rival corporations, beneath a trial scheme
  • A clickable possibility on all worth comparability web sites to make sure prospects see costs in the entire of the market, not simply most popular suppliers
  • A cap on the fees levied when a pre-payment meter is put in beneath warrant.