Energy bills set to rise

Household bills could rise as the energy regulator considers increasing the energy price cap because of Covid-19.

Ofgem is consulting on amending the default tariff cap, which would increase household energy bills by £21 per customer from April next year.

The lockdown has significantly affected the energy industry, with many workers being laid off, furloughed or working from home, resulting in an increase in domestic energy use.

However, some customers are struggling to pay their bills and the impact of this could increase over the winter as people use more energy.

Ofgem is proposing to make an adjustment for the summer 2021, of £21 per customer to the existing price cap of £1,042 a year.

That is expected to help remove some of the pressures on energy companies who are facing high levels of unpaid bills as many households struggle to pay during the pandemic.

Natalie Hitchins, head of home products and services at consumer champion Which?, said the prospect of higher energy bills will be “deeply concerning” for consumers, especially those in vulnerable situations or who are struggling financially.

She said: “The regulator must work with energy companies to ensure those who are struggling get the help they need to keep their homes heated through the winter and beyond.

“Standard or default tariffs are usually the most expensive – so anyone on these tariffs should shop around for cheaper deals and consider switching as they could save more than £200 a year.

“Customers could also save money by claiming tax relief if their job has become home-based due to the pandemic.”