Energy regulator Ofgem has announced that the price cap for default domestic energy will be raised by £96 in April 2021 to help cover supplies extra costs.

This does come as something of a blow to UK customers at a time when many more people are at home working or homeschooling and therefore using more energy.

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The default domestic price cap affects customers who have never switched suppliers or whose discounted deals have expired, which is around 50% of all UK customers.

In October Ofgem did lower the price cap by £84, so now raising it by £96 is more or less putting it back to where we would expect it to be, but it is a kick in the teeth to do this during a lockdown.

Citizens Advice did some research in December 2020 which found that 2.1 million households were behind with their energy bills. This is an increase of over half a million since before the pandemic started. Jobs loses, home workers, homeschoolers and people spending more time at home due to being furloughed will have increased spending on energy.

So at a time when energy companies have got an increase in usage, and therefore income, the cap has risen. However, you can avoid price rises by switching, which is something all energy customers should do on a regular basis to ensure they are getting the best value for money. Remember, when switching you should also look at earning cashback from sites such as QuidCo.

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