Energy Bills are increasing. Here’s why and what we are doing to help.
Citizens Advice Essex, Thursday, August 12th 2021
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Ofgem, the UK’s Energy Markets regulator, recently announced an increase in the “price cap” for default tariffs. The cap was initially introduced as a means by which customers who don’t shop around for a better deal pay no more than the regulator considers to be “fair”. Similar capping arrangements apply to customers using pre-payment meters, and here too, prices are also expected to rise.
The announcement came, due to what the regulator describes as “unprecedented” rates of increase in fossil fuel prices, ultimately feeding into the cost we pay as customers for our electricity and gas.
There are a couple of crucial points to make about the hike. Firstly, the “price cap” is, and never was, an absolute limit on your bill. Instead, it’s a limit on the unit price you pay.
Secondly, households on low incomes and with “hard to heat” homes will be worst affected. These are households that are more likely to be in “fuel poverty”. Analysis by campaign group The End Fuel Poverty Coalition suggests the number of families in fuel poverty is set to rise by almost 400,000 as a result.
“Fuel poverty” is a term that has been subject to some debate. Definitions have changed over the years leading to different government responses. In practical terms, fuel poverty is easy to spot when you get to know someone’s finances. For us, at Citizens Advice, it means speaking to families who face the impossible choice of “heating or eating” or needing to “self-ration” energy use, so their home is not kept adequately warm. This can have a significant impact on health, for example, causing or exacerbating respiratory conditions. For pre-payment meter customers, an increase in the price they pay will also lead, we think, to a rise in the number of households “self-disconnecting” from their supply. Earlier this year, we were pleased to distribute around £130,000 worth of emergency fuel vouchers through funding from Ofgem available to us throughout the pandemic for people in just this situation. However, that funding has now ended.
So, how can we help?
For some people, now will be the time, perhaps having held off from doing so for years, to take action on their bill by switching tariffs or suppliers. We provide our own energy comparison website, and we can talk you through the options even if you don’t have access to the internet.
Locally, we have a team of 14 specialists, funded by the Energy Redress Scheme and National Grid’s Affordable Warmth programme. They work intensively with individuals and families, targeting their work at those in the greatest need. The team helps through income maximization, by helping with existing fuel debt and by giving practical advice about reducing energy consumption in the home. We also work closely with both borough and districts and The County Council, supporting their work in deploying grants that can help improve energy efficiency in the home.
We also work as the energy lead for the region and are funded to support other local Citizens Advice to improve their work to address fuel poverty and cascade awareness training to other charities and organizations working with the fuel poor.
By working this way, and with our partners; by tackling some of the root causes of fuel poverty on an individual level, we can help improve our client’s resilience, whatever happens to fuel prices in the future.
For Citizens Advice support in helping find a cheaper deal, go to www.energycompare.citizensadvice.org.uk or call 0808 223 1133
If you are struggling to afford your energy bills, call the Citizens Advice Essex specialist Warm Homes team on 0300 3033 789