Energy Cap Gets a Boost: A £16 Lift to Pay Off Bill Burden
From April 2024 onwards, Ofgem will raise the energy price cap by £16 – the equivalent of £1.33 per month – to help suppliers claw back almost £3 billion in unpaid bills. Think of it as a rescue mission for consumers caught in the cost‑of‑living wave.
What’s the Deal?
- The cap hike is a one‑off adjustment lasting until March 2025.
- Funds raised will go straight to customers who are struggling to settle debts.
- People who use pre‑payment meters will not feel the difference – they’re not part of this round.
Why the Surge?
Energy debt has piled up to an all‑time high, thanks to the recent cost‑of‑living crunch. Ofgem says the sector hit a new peak – nearly £3 billion in arrears.
Ofgem’s Take
Tim Jarvis, Ofgem’s market chief, acknowledges the urgency: “We’ve put this forward without taking it lightly, but we need to sort out the debt problem fairly.”
He adds that the cap has been a protective shield against a wild gas market, yet it’s a blunt tool that could evolve as the energy landscape shifts.
Bottom Line
In short, the temporary hike will fuel a smoother repayment spree without punishing anyone. That means less pressure on those who already wrestle with bills, while keeping the overall market more stable.
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