Price cap for pre-payment gas and electricity meters

3rd August 2016 | Residential Energy

Energy regulator Ofgem has announced a price cap for pre-payment gas and electricity meters. These are typically meters which are used by the poorest households in the UK, which provide amongst the most expensive sources of electricity and gas for consumers. It will affect about four million households, and should save them an average of £75 per annum, from April onwards.
A total £300m will be cut from UK home bills each year and the price cap will remain in place until 2020, when the introduction of smart meters across the whole country is expected to have been complete.
The reason this is price cap is being brought in is that 70% of pre-payment users are on the expensive “default” or “out of contract, variable” rates, which are more expensive than contract rates – this is costing consumers £1.4bn more than in a competitive market. The cheapest plans are £260-£320 more expensive than for households paying by direct debit.
More information available on the website below