Energy bills update as Government responds to calls for cap reduction | Personal Finance | Finance
The Government has issued a response to calls for energy bills to to be reduced this winter.
The average household currently forks out on average £1,717 a year for a direct debit dual fuel account, under the Ofgem price cap.
This price cap increased 10 percent from the start of October, up from the previous £1,568 a year.
With heating bills set to rise as we go into the colder months of the year, Labour MP Mary Kelly Foy asked Energy Secretary, Ed Miliband, if he would “meet with Ofgem to discuss the potential merits of reducing the energy price cap for winter 2024-25”.
Energy minister Miatta Fahnbulleh responded to spell out the Government’s efforts to keep bills down.
She explained: “The Government is committed to ensuring vulnerable households are supported with their energy bills. We are looking at all options on how to make energy bills more affordable for these households.
“In the short-term, we are continuing to deliver the Warm Home Discount, which provides a £150 annual rebate on energy bills for eligible low-income households.
“We are also working with energy suppliers to ensure they are providing additional support to vulnerable customers that are struggling with bills.”
The Warm Home Discount is a one-off £150 amount that comes off your electricity bill, with the money paid to your supplier, who deduct the amount from your bill.
Those on Pension Credit may qualify for the support, if you have a low income and high energy costs, and if your supplier is part of the scheme.
Pension Credit claimants also qualify for the Winter Fuel Payment, a payment of £200 or £300 which goes out to those on certain means-tested benefits, including Universal Credit, Child Tax Credit and Working Tax Credit.
Ms Fahnbulleh also explained the different elements that go into determining the price cap. She said: “The energy price cap is set by Ofgem and there are different costs included in the price cap, such as the wholesale cost of energy.
“Any changes to these costs will affect how much the price cap will be each time it is reviewed, and the main driver of the price cap increase for the period 1 October to 31 December 2024 was an increase in wholesale energy prices.”
But she also said that given the recent volatility in the energy market, it’s important to focus on energy security at home.
She stated: “The Government believes the only way to protect consumers permanently is to speed up the transition towards homegrown clean energy and reduce our reliance on volatile international fossil fuel markets.”
