In a brilliant step towards saving customers from heavy energy bills, the energy regulator Ofgem has made an announcement to cap prepayment energy bills. The cap would be in effect from April and is expected to affect 4 million customers who would save around £80 a year on their energy bills. This step was followed by the report on ‘competitive pricing’ published by Competition and Market Authority which examined the energy market for two complete years.
The decision was made after the CMA’s revelation about prepayment customers being left out from the best deals enjoyed by people who choose other payment methods like direct debit, cash or cheque. The levels of the cap would vary in accordance with the meter type and region for both electricity and gas. The plans would be updated every six months with the government planning to keep them till 2020, the year when it plans to finish smart meter installations across the UK.
According to estimates made by Ofgem, the prepayment customers can expect a 10 to 15% decrease in their gas bills. It also gauged that customers using electricity for heating their homes would find their bills slithered by £80 a year. According to August 2016 figures, it was discovered that prepayment customers actually paid £220 a year more than others who benefit from the cheapest deals that are not accessible to the prepayment customers.
Dermot Nolan, chief executive of Ofgem said: “We want all consumers to enjoy the benefits of a more competitive energy market, regardless of their circumstances. Customers who prepay for their energy are denied the best deals on the market available to those using other payment methods. They are also more likely to be in vulnerable circumstances, including fuel poverty. This temporary cap will protect these households as we work to deliver a more competitive, fairer and smarter market for all consumers.”
The step has been applauded by all corners of the energy market and is expected to be well received by the customers. Gillian Guy, chief executive of Citizens Advice, said: “This cap should stop some of the poorest households paying over the odds to heat and light their homes. It will help millions save money but action shouldn’t stop there. The government has rightly expressed concern that loyal customers on standard tariffs are paying over the odds for their gas and electricity. It could help more struggling households, including low-income pensioners and families, by extending this cap to people eligible to receive the Warm Homes Discount.”
Shay Ramani, founder of energy comparison site FreePriceCompare.com said, “Ofgem has taken a positive step for prepayment customers. This not only gives price cuts to the millions of customers but will also help them to get more light and energy in their homes. More of such measures are expected from the energy regulator and the government.”
To conclude, those on prepayment terms should take a breather as now they can get more energy by spending less. For more of such news and updates, keep reading our website https://freepricecompare.com/home-energy/. We also offer energy comparison services which can be leveraged by calling our meticulous and reliable team of energy experts on 02034757476.
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