Energy bills set to rise as Ofgem updates price cap

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Millions of households face higher charges from October as the energy regulator updates its cap. While new support schemes are being introduced, many families will still feel the squeeze.

Transcript

00:00Energy bills are putting the pinch on bills for households across the country.

00:04The energy price cap is due to rise, but how will this affect you?

00:08I spoke to an expert on the topic to find out.

00:10So the energy price cap is basically a set of rules that is imposed by the energy regulator Ofgem

00:17that governs the amount that energy suppliers can charge for a unit of energy.

00:22So that impacts the bills of roughly two-thirds of households

00:27who are on tariffs that are governed by the energy price cap.

00:32The energy price cap has gone up.

00:34It will be rising for all of those households from the 1st of October,

00:38and it's going up by about 2%.

00:40So a typical household will see their bills increase, unfortunately,

00:44just at the time that we are going into those colder winter months,

00:48we're turning the heating on, we are using more energy.

00:51So most of us are on tariffs at the moment that are governed by the Ofgem price cap.

00:57About a third of households are on fixed tariffs.

01:00It's a great time to review whether your direct debit is correct.

01:04Lots of us are paying slightly the wrong amount.

01:06Some of us are paying too much and are building up a significant amount of credit.

01:10Your energy supplier might not always tell you if that's the case,

01:13because they quite like having that little bank of credit in your account.

01:16Some of us, our bills are set too low, and we are building up,

01:19some of us are building up a pretty significant amount of energy debt,

01:23which it is really important to get on top of.

01:25Ofgem say that the price cap is designed to protect consumers

01:28and to stop unfair profiteering.

01:30Do you really think that it's working as intended in that respect?

01:33I think that it protects consumers to a certain extent,

01:36but it's absolutely not a perfect measure.

01:39So the price cap was brought in under really different circumstances

01:43before the energy crisis, which we all remember,

01:46our energy bills really significantly shot up.

01:49Lots of companies went bust at that time.

01:51Since then, there are far fewer energy suppliers,

01:55which means that there's very little competition in the market.

01:58Do you think that there's anything that government

01:59and local authorities can or should be doing?

02:02What I think the government and the regulator of Ofgem should be looking at

02:06is really trying to increase competition in the energy market.

02:09At the moment, we have a really small number of energy companies

02:12who are not having to do that much to compete.

02:15Because of that lack of competition in the market,

02:17it's not worth it for a lot of us to switch.

02:20And it hasn't been for a long time.

02:21So most of us are kind of sitting as we were.

02:24You know, we're sticking with the same old energy companies

02:27and that's exactly what they want.

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