Energy regulator Ofgem has announced that it will be lowering the level of a temporary price cap on prepayment meters which was first introduced in April. The move will mean a bill reduction of up to £19 a year for three million customers who rely on prepayment meters for their energy, following on from a £80 drop when the cap first came into force, according to Sky News.
Ofgem initially introduced the cap to help alleviate pressure on customers who pay up-front for their energy at a time when many suppliers were implementing significant price hikes.
Prepayment meters are often installed when a household struggles to pay for their gas and electricity, meaning they can be most vulnerable to the impact of higher bills.
When it was first brought in the cap enforced a maximum price for electricity, gas and dual fuel customers dependant on their region.
The average cap was set at between £547.07 and £625.85 per year for electricity and £520.07 per year for gas, but this will now drop to between £528.28 and £600.13 for electricity and £519.74 for gas.
Dual fuel customers will see their average cap reduce from £1,067.14 to £1,048 per year.
The updated caps will come into effect from 1 October and the system will be assessed again in six months” time.
Ofgem first announced the temporary cap in response to a two-year investigation into the energy market which found the Big Six suppliers were overcharging customers by up to £1.4bn a year.