Ofgem plans to raise household energy bills to support suppliers in the wake of consumer debts reaching an unprecedented £3bn.
The energy watchdog is considering a temporary increase of £16 in the pricing cap, which translates to about £1.33 monthly, to be implemented from April 2024 to March 2025.
Previously, Ofgem adjusted the price cap from the existing £1,834 for an average dual-fuel household to £1,928 starting January 1.
Despite these changes, energy costs are still significantly higher than past averages, and energy debt has soared to its highest level ever, exacerbated by the ongoing cost-of-living crisis.
Ofgem acknowledges that the massive amount of debt might challenge suppliers in their collection efforts, necessitating additional resources to comply with Ofgem’s stringent regulations regarding customer treatment, especially those facing payment difficulties.
The proposed additional funds would enable suppliers to provide adequate support to customers. This includes establishing payment plans, considering the write-off of unmanageable debts on an individual basis, and arranging feasible repayment breaks.
