Energy suppliers are advocating for ongoing targeted support for individuals facing financial difficulties as gas and electricity prices increase. As of Wednesday, costs have risen by 2% due to the latest price cap from the regulator Ofgem, affecting millions in England, Wales, and Scotland.
Recent data shows that households owe a record £4.4 billion to energy suppliers, prompting concerns that many will have a challenging winter. In response, the government has stated it is taking urgent action to assist vulnerable families this winter. Some energy companies have introduced initiatives like debt write-off schemes and emergency vouchers, but the support varies across the industry.
Ned Hammond from Energy UK noted that existing support measures are insufficient and called for a more effective plan to address fuel poverty. The government has pointed to the expanded Warm Home Discount, which provides a £150 reduction for one in five eligible households. They also plan to announce a significant home upgrade initiative aimed at improving energy efficiency for up to five million homes.
The recent price cap increase results in a typical household’s annual energy bill rising to £1,755, which represents an increase of £35 from the previous figure. Households are encouraged to explore fixed tariff options that may offer savings. The price cap is designed to limit how much energy suppliers can charge per unit, and higher bills reflect the costs associated with energy supply management as well as the Warm Home Discount.
Energy UK urged more targeted identification of households in need, suggesting that income, health, and energy consumption data should inform support strategies, potentially funded through taxation. A report indicated that a £1.5 billion annual investment could bridge the fuel poverty gap, saving impacted households an average of £400 each year.
Ofgem proposed establishing a Debt Relief Support Scheme to assist customers with unrepayable debts, which may require collective funding through energy bills or government resources. The regulator aims to provide a consistent way for households to obtain assistance from charities and debt support organizations. After an initial reduction, the government has expanded access to winter fuel payments for nine million pensioners in England and Wales, ensuring they receive financial support promptly.
Source: https://www.bbc.com/news/articles/cm2zr4nym9zo?at_medium=RSS&at_campaign=rss