Money Wellness
A worried-looking woman reading her energy bill
category iconbills
category iconcost of living
calendar icon08 Aug 2023

Energy price cap ‘is keeping bills artificially high and must go’

The energy price cap needs to be scrapped as it’s creating significantly higher prices for customers, according to a new report.

Research from the Centre for Policy Studies concludes the price cap no longer fulfils its original purpose and needs to go.

The price cap was brought in to protect customers unable to switch between providers due to illness, disability or being on a prepayment meter.

But it now covers 29 million households, setting the price of gas and electricity for practically the entire market.

For nearly two years, almost all tariffs have been priced at or very close to the price-capped level.

The report says there are no signs this is likely to change in the near future. This means the government is effectively setting the price for gas and electricity, removing any chance for customers to switch to a better deal.

Government must act

The government has been urged to:

  • reintroduce competition into the energy market
  • introduce better protections against fuel poverty e.g. cheaper tariffs for those spending an excessive proportion of their income on energy bills
  • stop the practice among energy companies of reserving the best deals for new customers
  • build a more resilient energy market that can cope with more volatile energy prices
  • make all changes with a view to achieving net zero ambitions

Separate report highlights energy companies massive profits

This comes as another report by a coalition of charities including Oxfam and Greenpeace has found energy suppliers could rack up profits from household bills of £1.74bn in the next year.

If you’re struggling to pay your energy bills

The first thing you should do if you’re struggling to pay your energy bills is get in touch with your provider. A lot of suppliers offer financial support to qualifying customers who have money issues.

You may also benefit from debt advice if the cost-of-living crisis means it’s difficult to make ends meet. We’ll be happy to help with this.

 

Avatar of Rebecca Routledge

Rebecca Routledge

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

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