Energy price cap to fall but bills to include ‘temporary’ charge to help tackle record debt
The energy price cap is to fall by £20 a month, the industry regulator has announced, but households are to face an additional “temporary” charge to help suppliers support struggling customers with record levels of debt.
Ofgem confirmed a 12% price cap reduction will take effect from 1 April, taking the annual energy bill for a typical household paying by direct debit for gas and electricity to £1,690.
The current level, in place from January to March, is £1,928.
The fall reflects lower wholesale prices, with natural gas costs over the peak winter season falling across Europe due to higher stockpiles.
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A mild winter has been a factor in the drop.
The adjustment by Ofgem, while some relief for household budgets squeezed by the tough economy, still leaves the cap more than 50% up on pre-crisis levels.
The regulator confirmed alongside the cap figure that it was taking action to tackle a record £3.1bn in bill arrears, though prepayment meter customers would not be affected.
Ofgem’s plans aim to bolster support for energy customers in debt to their suppliers. Pic: PA
“To address this challenge in the short-term, Ofgem will allow a temporary additional payment of £28 per year (equivalent to £2.33 per month) to make sure suppliers have sufficient funds to support customers who are struggling”, its statement said.
“This will be added to the bills of customers who pay by direct debit or standard credit and is partly offset by the termination of an allowance worth £11 per year that covered debt costs related to the COVID pandemic.”
Ofgem said its wider action would include further closing the gap between the higher charges that prepayment meter customers pay and what most other households face.
It said those on prepayment meters would save around £49 per year while direct debit customers would pay £10 per year more.
The watchdog said that the new figures, taken together, meant that bills would still fall to their lowest level since Russia’s invasion of Ukraine in February 2022.
Ofgem says lower unit charges will mean that bills will fall for everyone in April, despite the debt aid elements. Pic: iStock
Russia’s vast gas supplies to the continent were shut down shortly after its military action began, forcing a scramble for replacement volumes.
Much of the void has been filled by additional supplies from Norway and heightened shipments of liquefied natural gas (LNG).
Market experts have warned that a return to pre-crisis energy prices is unlikely to occur given the new realities over the source of supply hampered, in the short term at least, by attacks on shipping in the Red Sea that have forced LNG cargos to make longer journeys.
The trend of higher prices has led to questions over whether the price cap, initially introduced to prevent rip-off charges, has become a barrier to competition. Ofgem is working with the government to address the cap’s future.
It is now utilised by the vast majority of homes in the wake of the supplier crisis that began in 2021 that saw dozens of operators collapse, including Bulb.
Fixed deals have been hard to come by ever since but there are some that have undercut the price cap.
Read more:
What is the price cap – and how will it affect my bills?
Research for professional services firm KPMG, released separately on Friday, suggested that 48% of households believed the price cap was a barrier to fixed-term offers by suppliers.
A third of respondents said they no longer shopped around because of the cap.
Price comparison site uSwitch said Ofgem’s wider action on elements of the price cap bill should help improve the volume of offers.
Its director of regulation, Richard Neudegg, said: “Consumers have been patiently waiting for better tariff choices, and many are desperate to take advantage of cheaper rates.
“If you are on a standard variable tariff, now is the time to start keeping an eye out for deals.
“The end of the Market Stabilisation Charge also on 1st April will be a positive step, taking out an unnecessary premium on deals.
“However, Ofgem’s decision to extend the Ban on Acquisition-only Tariffs for another year is a gamble.
“Although this could be cut to six months, while it’s in play, fixed deals risk being more expensive than they would otherwise be, at a time when customers are finally hoping to lock in some certainty.”
UK
Starmer urges anyone with information on Epstein case to come forward – after Andrew misses Congress deadline
Sir Keir Starmer has urged anyone with information on the Jeffrey Epstein case to come forward after Andrew Mountbatten Windsor missed the deadline to appear in front of US Congress.
US legislators have criticised Andrew for what they describe as “silence” amid their probe into Epstein after he failed to respond to their request for an interview.
When asked about Andrew missing the deadline and whether the former prince should help the case in any way he can, Sir Keir said on his way to the G20 summit in South Africa: “I don’t comment on this particular case.”
He added that “a general principle I’ve held for a very long time is that anybody who has got relevant information in relation to these kind of cases should give that evidence to those that need it”.
Andrew is not legally obliged to talk to Congress and has always vigorously denied any wrongdoing.
Sir Keir Starmer spoke to reporters on his way to the G20 in South Africa. Pic: Reuters
It comes as Marjorie Taylor Greene, a loyal supporter-turned-critic of US President Donald Trump, said on Friday she is resigning from Congress in January.
Ms Greene’s resignation followed a public falling-out with Mr Trump in recent months, as the congresswoman criticised him for his stance on files related to Epstein, as well as on foreign policy and healthcare.
Members of the House Oversight Committee had requested a “transcribed interview” with Andrew in connection with his “long-standing friendship” with Epstein, the paedophile financier who took his own life in a New York prison in 2019 while awaiting trial on sex trafficking and conspiracy charges.
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Releasing the Epstein files: How we got here
But after saying they had not heard back, Democrats Robert Garcia and Suhas Subramanyam accused Andrew of hiding.
Their statement read: “Andrew Mountbatten Windsor’s silence in the face of the Oversight Democrat’s demand for testimony speaks volumes.
“The documents we’ve reviewed, along with public records and Virginia Roberts Giuffre’s testimony, raise serious questions he must answer, yet he continues to hide.
“Our work will move forward with or without him, and we will hold anyone who was involved in these crimes accountable, no matter their wealth, status, or political party. We will get justice for the survivors.”
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The new Epstein files: The key takeaways
It follows Andrew being stripped of his prince and Duke of York titles earlier this month.
He had previously agreed to stop using his titles, but had expected to remain a prince and retain his dukedom, ahead of the publication of the memoirs of the late Ms Giuffre, who had accused him of sexually assaulting her when she was a teenager – an accusation he denies.
A 13-year-old girl has been arrested on suspicion of murdering a woman in Swindon.
Police said the teenager was detained following an incident in Baydon Close, Moredon, in the Wiltshire town on Friday evening.
Officers responded to reports of disorder inside a house. When they arrived, a woman in her 50s living at the address was found to be not breathing. She was declared dead at the scene.
There were no other reported injuries.
Forensic officers are at the scene to collect evidence
Detective Inspector Darren Ambrose, from Wiltshire Police’s major crime investigation team, said: “This is a serious incident in which a woman has sadly died.
“We have set up a cordon at the address while an investigation is carried out.
“I can confirm that we have arrested a teenage girl in connection with this incident and we are not looking for anyone else.”
Police have asked people not to speculate about the incident online as this could prejudice the case.
A police statement read: “Residents can expect to see an increased police presence in the area while we continue carrying out our enquiries into the woman’s death.
“The suspect remains in custody at this time.”
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Police said anyone with concerns should speak with their local neighbourhood policing team, either by emailing or approaching officers in person.
Rail fares are to be frozen for the first time in 30 years, the government has announced.
Ministers promised that millions of rail travellers will save hundreds of pounds on regulated fares, including season tickets and peak and off-peak returns between major cities.
The fare freeze applies to England and services run by English train operators.
People commuting to work three days a week using flexi-season tickets will save £315 a year travelling from Milton Keynes to London, £173 travelling from Woking to London and £57 from Bradford to Leeds, the government said.
The changes are part of Labour’s plans to rebuild a publicly owned Great British Railways. Other planned changes include tap in-tap out and digital ticketing, as well as investing in superfast Wi-Fi.
The freeze applies to regulated fares, including season tickets and peak and off-peak returns. Pic: iStock
Chancellor Rachel Reeves said the government was introducing a freeze on rail fares for the first time in 30 years, which “will ease the pressure on household finances and make travelling to work, school or to visit friends and family that bit easier”.
“We all want to see cheaper rail travel, so we’re freezing fares to help millions of passengers save money,” Transport Secretary Heidi Alexander said.
“Commuters on more expensive routes will save more than £300 per year, meaning they keep more of their hard-earned cash.”
Rail unions and passenger groups welcomed the move, praising how it will make travel more affordable for passengers and promote more sustainable travel alternatives.
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Eddie Dempsey, general secretary of the Rail, Maritime and Transport union, said: “More affordable fares will encourage greater use of public transport, supporting jobs, giving a shot in the arm to local economies and helping to improve the environment.”
TUC general secretary Paul Nowak said the rail fare freeze “will be a huge relief to working people”.
“This is the right decision, at the right time, to help passengers be able to afford to make that journey they need to take, and to help grow our railway in this country, because the railway is Britain’s green alternative – taking cars and lorries off our congested roads and moving people and goods safely around our country in an environmentally-friendly way,” Mick Whelan, general secretary of the train drivers union Aslef, said.
The Tories welcomed the move but said the government was “late to the platform”.
Shadow transport secretary Richard Holden said: “In government, the Conservatives kept fares on the right track with below-inflation rises and consistently called for no further hikes to protect hard-working commuters.”
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