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Money Box: How new rules might affect your energy bills

21/05/2022

How new rules might affect your energy bills

BBC Radio 4 - Money Box, How new rules might affect your energy bills

Ofgem on plans it says will make sure fewer energy companies go out of business.

How  Ofgem plans to reduce the risk of energy suppliers going bust and what that could mean for your billls.

This week, the energy regulator Ofgem, announced that the price cap, which most of us now pay for our electricity and gas, would be set every three months, not six as it does now. It says updating it more frequently should help avoid the kind of price shocks people are seeing now - with some saying their bill is doubling. It will also help the suppliers because if prices rise sharply they will not have to sell electricity and gas at below market rates for so long. 
Ofgem is also introducing a new charge on firms that offer customers cheaper deals. In future if someone switches to a cheaper supplier that supplier will have to pay a fee to their old supplier of part of the difference between the old and new rate. Critics say this Market Stabilisation Charge will make it uneconomic to offer cheaper deals.  We'll discuss that with Neil Kenward the Director for Strategy at Ofgem.

As inflation hits a 40 year high with prices rising 9% a year, our reporter Dan Whitworth visits Money Matters an advice centre Glasgow, which says it's facing unprecedented demand for help.

And, in April, the Institute for Fiscal Studies warned that for some people the interest rate on their student loans could hit 12% later this year, because it is linked to inflation.   It warned that might put some school-leavers off university. Or that high-earning graduates might be tempted to raid their savings to pay off their remaining debt. We'll hear from one graduate considering borrowing to pay off his student loan, and speak to Nick Hillman, the Director of The Higher Education Policy Institute, about the pitfalls of doing that.

Presenter: Paul Lewis
Reporter: Dan Whitworth
Researcher: Amber Mehmood
Editor: Jess Quayle

(First broadcast 12pm Saturday 21st May, 2022)

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