Millions see energy bills surge by 62%
... and as the crunch bites, 2 in 3 are buying less fruit
MORE than seven million households saw their monthly energy bill direct debit surge by 62 per cent in the spring.
The situation was even worse for some 500,000 households where the monthly debit for electricity more than doubled, forcing people to cut back on essentials from food to car journeys.
Details have been revealed by the energy watchdog, Ofgem, which has put five companies on notice that they need to improve the way they decide changes to monthly payments or risk fines.
Energy companies have also been told they must refund customers quickly if they build up a large credit balance because the direct debit demands are inaccurate.
The Ofgem price cap saw the annual bill rise by an average of £693 a year to £1,971 from April 1 – an increase of 54 per cent. But energy firms increased direct debits charges for millions by much more. And there are predictions the cap could rise to as much as £3,400 a year from October 1.
Ofgem said: ‘Over seven million energy consumers on a Standard Variable Tariff (SVT) saw an increase in their direct debit between February and April 2022. On average, direct debit levels for customers on an SVT increased by 62 per cent in this period. Eight per cent – around 500,000 households – experienced an increase of more than 100 per cent.’
The watchdog has not found evidence of unjustifiably high direct debits, but it says the process for setting them by five companies – Ecotricity, Good Energy, Green Energy UK, utilita Energy and Tru Energy – contained flaws. This meant there was a risk the monthly demands could be too high or too low. The companies were told to improve the accuracy of their direct debit setting or face enforcement action, which could lead to fines.
Director of Policy and Advocacy at Which?, Rocio Concha, said: ‘It’s encouraging to see the regulator taking action over poor performance and Ofgem should not hesitate to impose penalties on any suppliers that fail to make the nec
‘Action over poor performance’
essary improvements.’ It comes as two in three people have cut down on fruit and veg amid the cost of living squeeze.
A survey of 2,000 shoppers found 84 per cent are changing how they shop and eat. Some two in three – 62 per cent – are buying less fruit and veg.
The cost of milk has also risen by more than 25 per cent since the start of the year. A basic four- pint carton of semiskimmed milk has risen by an average of 30 pence to £1.45.