Lifting energy price cap ‘to cost families £100 a year’

ELEVEN million households supposedly protected by the Government’s energy price cap will be told today that bills are set to go up by around £100 a year.

The cap on standard variable tariffs (SVTs) was introduced on January 1 with enormous fanfare. Customers were told they would save an average of £76 a year – or around £1billion in total.

Theresa May had said it would ‘cut bills for millions of families and people across the UK who have been ripped off by energy companies for far too long’.

However, the industry regulator Ofgem has reviewed the cap and is expected to announce today that it will go up by as much as £100 a year from April 1.

A similar rise is expected to be unveiled for another six millions households with pre-payment meters. These are most commonly found in rented homes or households where owners are already struggling financially, as they help control how much is spent on energy.

Meanwhile, Ofgem said it sets the cap based on the wholesale costs of gas and electricity, which have risen sharply recently. A spokesman insisted: ‘While costs were always expected to rise for this period, had the cap not been in place, SVTs could have gone up by considerably more.’

Experts say customers were misled by ‘fake’ claims from the Government and Ofgem that they’d save £76 over a year.

But Stephen Murray, of MoneySuperMarket, said the issue was an ‘easy situation to fix and the message is clear – take control of your bills and don’t let the regulator determine how much you’re paying. Go online today and switch to a competitive tariff. It takes five minutes and you could save £200 on your bills.’

And head of energy at auto-switching service WeFlip, Sally Jaques, added: ‘It will be ironic if, three months after being introduced, the Government’s own price cap unintentionally delivers one of the single biggest energy price increases the market has seen for years.’

‘One of the biggest price rises for years’