New price cap on energy bills being considered by regulator Ofgem

Credit: PA

A new price cap on energy bills aimed at protecting vulnerable consumers is being considered by the regulator.

Ofgem said that a "safeguard tariff", which would protect more low-income households from overpaying for their energy, is one of a number of options it is looking into.

It said research carried out with the Competition and Markets Authority points to "vulnerable consumers in particular getting a poor deal".

A temporary cap, which saves over four million customers around £80 a year, was introduced in March.

Dermot Nolan, chief executive of Ofgem, said: "Protecting vulnerable consumers is a priority for Ofgem.

"We are committed to ensuring that the more disadvantaged in society are not left behind as we move towards a smarter, more competitive energy market.

"That's why we are starting new work to protect vulnerable customers, including the option of introducing a safeguard tariff for them."

Among its other proposals are plans to make switching easier and to cap warrant charges to install pre-payment meters and ban these charges altogether for the most vulnerable.

The regulator also said it wants to "take the hassle out of switching".

"We are pressing ahead with a raft of reforms to make it even easier for people to switch no matter how they choose to shop around," Mr Nolan added.