Published On: Sat, May 11th, 2024
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Energy bills warning as minister defends £28 price hike for customers | Personal Finance | Finance


Ministers have explained why billpayers are to pay an extra £28 for their energy bills over this financial year.

Regulator Ofgem previously allowed suppliers to introduce the £28 levy on energy bills to recoup arrears they were due from customers.

Alba Party MP Kenny MacAskill asked the Government for more details about the scheme, asking in Parliament: “What allowance for servicing consumer debt is permitted by Ofgem in setting the level of the default tariff cap.”

Treasury minister Amanda Solloway said in response: “Ofgem has announced a one-off price cap adjustment of £28 (equivalent to around £2.33 per month) to be applied between April 2024 and March 2025 for direct debit and standard credit customers.

“This is intended to enable suppliers to recover reasonable costs as a result of increased levels of bad debt, ensuring the retail energy market remains resilient and suppliers are able to offer consumers an appropriate level of support in managing their debts.”

The energy price cap set by Ofgem fell from April, with average dual fuel household dropping from £1,928 a year to £1,690 a year.

However, many household bills increased from April, including council tax and water bills, as well as broadband and mobile tariffs.

British Gas chief executive Chris O’Shea in every UK household.

He told MPs on the Energy Select Committee: “We think that in order to have the proper smart grid that’s required to keep costs low in the future, everybody should have a smart meter.

“One of the things we should consider as to whether this is a voluntary programme, or whether it should be mandatory.”

Smart meters provide automatic readings to suppliers and show how much energy a person has used.

But there are often problems with the devices going into ‘dumb mode’, where an error means they no longer send readings.

Martin Lewis at this time of year to make sure they are paying the correct amount.

He said on his BBC podcast: “If you’re in credit and you tend not to build it up, at this point in the year, this is the time to get in touch [with your supplier] and say: ‘This is the bottom of the direct debit cycle, there’s no way I should be in credit right now, I’d like you to give that credit back please.’

“You might want to leave a little bit with them, half a month’s worth of direct debits, but if you’re two to five months worth of direct debits in credit right now, that’s too much, get that money in your pocket.

“Stop them earning the interest, they have billions of pounds of our cash they earn interest on, when that is our money.”

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