Ofgem Proposes £16 Increase in Energy Price Cap to Recover £3bn in Bad Debts

The proposed increase, to be levied from April 2024 to March 2025, aims to help suppliers recover from record energy debt levels amid rising living costs.

Ofgem, the energy industry regulator, is proposing a one-off increase of £16 in the energy price cap to help suppliers recover nearly £3bn in bad debts from customers struggling to pay their bills.
The proposed increase would be levied at £1.33 a month on bills paid between April 2024 and March 2025.
Energy debt has hit a record £3bn due to increases in wholesale energy prices and the wider cost of living crisis.
The proposed plan does not include passing extra costs on to customers who use prepayment meters, as they do not build the same debt level as credit customers.
Charities warn that millions of people are having to borrow money to pay essential bills at Christmas, with energy costs a key concern.