NEA responds to Ofgem’s changes to price caps

Today, Ofgem has released the new level of its default tariff cap, which will become effective as of 1st October. The new default cap will fall by £75 to £1179 for the average default customer, meaning a significant saving for those not on fixed energy deals. The pre-payment meter (PPM) cap however will be higher than the standard cap for the first time after a key change to the PPM cap methodology. The charity warns the impact will be felt by PPM customers just before the winter hits.

Peter Smith, Director of Policy and Research at fuel poverty charity NEA comments:

“After a significant price rise in April, it is encouraging to see that Ofgem are reducing the default cap when costs drop. We are however disappointed that the prepayment cap will now be higher than the default cap for the first time as they will now pay more smart metering costs despite the fact many PPM customers are still to benefit from the smart meter rollout. This will mean that some of the most vulnerable customers will be paying more for their energy than they would have done just before the winter hits.

“We continue to highlight key steps that Ofgem can currently take to protect low-income customers. We are also urging UK Government to ensure the Warm Home Discount scheme continues and is expanded. This can be achieved without increasing energy prices for other consumers by adjusting existing tax-funded support. We must also address the main causes of fuel poverty and invest central government funding back into energy efficiency”.

Notes for Editors

  1. If you would like further information, please contact Communications Officer, Aimee Barber: aimee.barber@nea.org.uk / 0191 296 2936
  2. Ofgem have announced the new price cap levels to be effective as of October 2019. For more information see https://www.ofgem.gov.uk/publications-and-updates/energy-caps-fall-winter-due-lower-wholesale-costs
  3. The Competition and Markets Authority recently announced their decision to bring the prepayment cap methodology in line with the default tariff cap. For more information please see https://assets.publishing.service.gov.uk/media/5d405962e5274a4016893bd0/Final_Decision_PPPC.pdf
  4. NEA works across England, Wales and Northern Ireland to ensure that everyone in the UK can afford to live in a warm, dry home. To achieve this, we aim to improve access to energy and debt advice, provide training, support energy efficiency policies, local projects and co-ordinate other related services which can help change lives. NEA also provides the secretariat for the All-Party Parliamentary Fuel Poverty & Energy Efficiency Group (FPEEG) to raise awareness of the problem of fuel poverty and the policies needed to eradicate it. For more information about FPEEG go to www.fpeeg.org.uk. For more information about NEA visit www.nea.org.uk.
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