Electricity price cap could help customers avoid debt

Energy regulator Ofgem is considering setting a price cap on electricity bills `to stop consumers being exploited` and to ensure that energy companies invest the £200bn required for Britain`s transition to a low-carbon economy, according to the Guardian.

Some of the `big six` energy companies are in favour of the price cap, because it would guarantee them a fixed rate of return on their investment.

A price cap could help to prevent the kind of sharp price rises that caused many energy customers to fall into debt on their accounts last year, according to a spokesperson for debt management company Gregory Pennington.

"A lot of people`s direct debit payments were not adjusted quickly enough after last year`s energy price rises, which meant a lot of people fell into debt on their accounts. Some customers have found this debt difficult to pay back.

"But a price cap would mean that prices couldn`t rise past a certain level, which would reduce the chances of customers falling into debt again.

"That said, people can still take responsibility for checking their usage and submitting regular meter readings to their providers, which should help them ensure they are always paying enough for their usage, rather than running into debt problems later on."

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Gregory Pennington offer debt management plans as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.