Vulnerable facing higher bills after Ofgem raises tariff

Vulnerable customers on Ofgem’s “safeguarding” tariff will pay more for their energy from April, after the regulator raised the level at which the scheme kicks in.

Customers’ annual savings of about £115 a year will fall to £66 a year in April when the tariff climbs from £1031 to £1089 because of higher wholesale energy costs.

Under the scheme, four million pre-payment customers have had their bills capped at £1031 a year. Now, an additional 1m households who are entitled to a warm home discount will receive this protection, but only at the higher rate for February and March.

Ofgem’s scheme started last year to protect the most vulnerable customers and will be extended to a further two million households in October if the Government’s plan to impose a price cap on standard variable tariffs is not ready to start.

The regulator’s chief executive Dermot Nolan last month apologised for Ofgem’s failure to keep bills in check saying it “should have done better”.

Nolan said today that protecting vulnerable customers was Ofgem’s priority.

The energy industry has been under political pressure since former Labour leader Ed Miliband proposed a price cap in 2013, with the idea later taken up by Prime Minister Theresa May.