Does energy supplier support go far enough to help struggling households?
The big five energy suppliers have met with the regulator, charities, and Martin Lewis to discuss what they can do to help consumers. But does it go far enough?
The meeting was to see how the energy suppliers could better support consumers as energy bills soar to all-time highs.
This comes as Ofgem’s energy price cap is now expected to rise by an eye-watering 65% - this will make the average household bill more than £3,000 a year, roughly four times what it was just two years ago. Figures from Cornwall Insights, a consultancy firm, estimate that domestic energy bills could rise to even £3,363 in the new year.
The ongoing Ukraine crisis is one of the big reasons the price cap is increasing. This is why the UK is planning to safeguard winter suppliers as the war continues. So far British Gas has signed a deal with Equinor, a petroleum refining company in Norway. This has the potential to provide gas to 4.5million households over the next three winters.
Why was an energy crisis meeting called?
Martin Lewis said: “The aim of this meeting was to cut the crap and get together with the leaders of the big firms, without government or regulators, to work together on the low-hanging fruit. It was a very productive, fast and action-orientated two hours.”
The meeting ended with the energy firms agreeing to work on a series of immediate changes, with the main bits including:
- Energy firms providing more direct support to consumer debt charities
- Energy firms being clear on how exactly direct debits are set
- Energy firms working with the regulator to shift burden away from standing charges
- Energy firms creating a blueprint on how to deal with customers who cannot pay their bill
In addition to this, other changes include energy firms making available how they calculate setting up direct debits as a payment method so the rationale is understood by customers.
They are also looking into making it clearer who is providing the best tariffs by publishing full tariff information for deals that are only available to existing customers.
There were also talks about setting up a priority call line for StepChange advisers and National Energy Action, a debt charity and fuel poverty charity respectively, so that consumers who need supplier-specific support can get it as soon as the need it.
Work is underway to better support the introduction of the government’s Energy Bill Support Scheme grant, where the government will give every household in Great Britain £400 off their electricity bill. On top of this, the energy firms have committed to thinking about ways to provide additional financial support to charities such as Citizens Advice, National Energy Action and StepChange.
However despite a productive outcome, Martin Lewis reiterated that “far more is needed, and that must come from a functioning government”.
“This winter will be catastrophic. The hideous spikes in wholesale energy costs will translate by October into Ofgem setting a price cap for a typical bill of £3,000 – close to four times what some paid just two years go. It will push millions into poverty.
“The Conservative Party must ensure there is a very quick succession process. We need a working and informed administration to tackle this at speed to forestall a very dangerous situation.”
Though progress has been made, it is clear that they haven’t gone far enough – as people need money and it’s not just vulnerable households that will struggle.
Ways to support yourself
Though this is a small step in the positive direction, you may feel like this isn’t enough and rightly so. If you feel like you need a bit more support for yourselves and/or families, check out the below government schemes:
- Fuel Direct is a government scheme that uses the benefits you receive to help directly pay off any energy debt you may have.
- The Warm House Discount is a one-off government discount to help low-income households pay for their energy bills.
- The Winter Fuel Payment is tax-free, one-off government payment that is given to the elderly to help them pay for their energy bills in the winter. The winter fuel payment usually varies between £100 - £300 depending on your personal circumstances.
- The Cold Winter Payment is a government special fund to help those most vulnerable pay for their energy bills in the winter.
We’ve also included some handy ways you can save some money on your energy bills around the house:
- Switch off any electric appliances not in use and it can save you up to £55 a year.
- Heat can escape through gaps around the house so draught-proofing all windows and doors can save you around £200 a year.
- Turn off any lights not in use which can save you up to £20 a year, with LED lights giving you a little bit of extra savings on top.
For more ideas on how to save money on your energy bills, check out the UKPower energy saving advice page.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.