Millions of vulnerable customers face energy bill rise

FIVE million households face a £57 rise in their annual energy bills as regulators have announced a higher ceiling on the amount firms can charge them for gas and electricity.

Ofgem has said that, from April 1, the level of the so-called “safeguard tariff ” will rise by approximately £57 a year from £1,031 to £1,089.

The tariff caps bills for pensioners and vulnerable and disabled customers who use prepayment meters.

Special protections are in place for these customers as they are more likely to struggle with bills and are less inclined to switch to better deals than other customers.

Experts warned that the rise could send a signal to energy providers encouraging them to raise prices for other customers.

Richard Neudegg, the head of regulation at uswitch.com, said: “This is an acknowledgement by the regulator that there has been a rise in wholesale and policy costs for suppliers, and there is always a risk that prices could move upwards for other customers.

“But we hope providers won’t raise prices across the board. We already know that standard variable tariff prices are too high, but the message for consumers is that they will need to switch to get the best deal.”

Last year, energy companies came under fire from Theresa May after they hit customers with a string of price rises, resulting in the Government announcing a price cap. The final details of the cap have yet to be released.

The increase to Ofgem’s safeguard tariff is mainly due to higher wholesale energy costs and policy costs to support low-carbon forms of electricity generation, it said.

The price rise comes just a year after the safeguard tariff was brought in for more than four million prepayment customers. Ofgem has extended the safeguard tariff to a further one million vulnerable customers.

Dermot Nolan, the chief executive of Ofgem, said: “Protecting vulnerable customers is a priority for Ofgem. That’s why we have extended the prepayment safeguard tariff to almost one million vulnerable households, which will help deliver a fairer, smarter and more competitive market for all consumers.

Claire Perry, the energy minister, said: “It is a positive step that a million vulnerable consumers are now being protected from unfair energy price rises through the energy cap.

“But energy tariffs are still too high – customers of the Big Six energy suppliers are overpaying by up to a staggering £1.4billion a year.

“This is totally unacceptable and why government will continue to go further – including by bringing in new laws in the forthcoming energy tariff price cap Bill to put an end to rip-off standard tariffs.”