Kingdom Housing / News Archive / Rising Cost of Gas Putting More Pressure on Fuel Poor Households

Rising Cost of Gas Putting More Pressure on Fuel Poor Households

Householders face a large rise in energy bills next month – as well as the possibility their supplier could go bust.

This is down to the massive rise in the cost price energy suppliers have to pay for gas – up 250% this year.

About 15 million households in England, Wales and Scotland face a 12% rise in their energy bills from October. This is because a higher energy cap is due to come into force in England, Scotland and Wales. 

The energy cap is the maximum price suppliers can charge customers on a standard – or default – tariff. Once the new cap comes into force, suppliers will be able to put prices up to the new maximum and – given the rise in gas prices – they certainly will. 

 

The Bad News:

This means that from the 1st October:

  • Those on standard tariffs could see an average increase of £139 (from £1,138 to £1,277) a year
  • People with pre-payment meters could see an average increase of £153 (from £1,156 to £1,309)
  • Whilst households on fixed tariffs will initially be unaffected, those coming to the end of their contract will probably be unable to find a cheap deal to replace it and will likely end up paying significantly more for their bills.

The worrying thing is that the figures above are not even the maximum amount you will be charged. It is a cap on rates that a supplier can charge for their standard tariffs.  As the rate is based on ‘typical usage’, If you use more than their ‘typical amount’ you will be charged more- which is bad news for low income families.

 

As it stands:

  • 7.8 mill UK citizens live in fuel poverty
  • Typically 30,000 people die each winter and about 1 in 8 of those deaths is linked to fuel poverty.
  • Prices are rising 13% this winter & that will push 488,000 more into fuel poverty

 

Will I still be able to find a cheap deal?

This is very unlikely. As it stands, the cheapest tariffs available today are still 40% HIGHER than they were this time last year and just finding a new deal may be difficult. The price comparison site Compare The Market has paused its energy switching service, and other similar sites are offering far fewer deals for customers thinking of switching.

However, it is still important to shop around for the best deal you can. The Martin Lewis Cheap Energy Club is not paid for promotion and automatically searches all available deals to find you the best option:

https://clubs.moneysavingexpert.com/cheapenergyclub

You can follow Martin Lewis online to find out the latest news as the situation develops:

https://twitter.com/MartinSLewis/status/1439916406510850055

Ofgen has also produced a guide to switching providers and accessing the best tariffs:

https://www.ofgem.gov.uk/information-consumers/energy-advice-households/switching-energy-tariff-or-supplier

 

What if my supplier goes bust?

A number of energy companies simply haven’t been able to keep up with the rising prices and gone bust already, others are at breaking point.

If you are an affected customer then the message is to sit tight. Ofgem, Britain’s energy regulator, will move you to a new supplier.

You should take pictures of your meters and download – or print out – your bills from your old supplier, ready for contact to be made.

The good news is that once Ofgem moves you to a new supplier you can then shop around. So if you aren’t happy you do not need to stay put.

If your energy supplier owes you money, your money is protected and you should get it back.

 

Further Help and Support

Warm Home Discount

If you are on low income you can get £140 off energy bills under the Warm Home Discount scheme – but some will need to apply for it- and you need to apply quick!

The Warm Home Discount scheme requires suppliers with a certain number of household customers to help vulnerable people in the UK pay for their energy. The money isn’t paid to you – it’s a £140 rebate applied to your electricity bill between October and March. If you’re on a prepay meter, you’ll usually be sent a top-up voucher.

 

The Core Group

If you get the guarantee credit element of pension credit you should get the warm home discount automatically, provided your energy supplier is part of the scheme.

You should receive a letter between October and December confirming when the £140 will be deducted from your energy bill. The letter may also ask you to contact the Warm Home Discount helpline to confirm your details. The helpline can also be used if you need assistance, or if you’ve not received your letter. Call 0800 731 0214.

 

On certain benefits? You may qualify, but you must apply!

If you’re on a low income and on certain means-tested benefits you may be eligible to apply for the Warm Home Discount (all firms with more than 250,000 customers will offer it), but in this scenario, it won’t be paid automatically and you’ll need to apply to your energy provider.  You will need to act fast, as once the money set aside is gone, the scheme will close.

 

The full eligibility criteria are as follows:

If you have an annual household income of £16,190 or less and you get child tax credit, or you receive income support or income-based jobseeker’s allowance, or you receive income-related employment and support allowance, you’re eligible if you have any of the following:

– A disability premium

– A pensioner premium

– A disabled child premium

– Child tax credit that includes a ‘disability’ or ‘severe disability’ element

– Parental responsibility of a child aged under five living with you

 

If you get universal credit and have earned £1,349 or less in at least one month since October 2020, you’re eligible if you have any of the following:

– The ‘limited capability for work’ element (with or without a ‘work-related activity’ element)

– The ‘disabled child’ element

– Parental responsibility of a child aged under five living with you

If you are not in the ‘core group’, you should apply now as schemes will be oversubscribed and close quickly.

 

Talk to your Fuel Provider

Speak to your supplier. Many suppliers have discretionary schemes of support to help customers experiencing financial difficulties.

Utilita are KHA’s default supplier and provide a range of support for customers facing a fuel crisis:

https://utilita.co.uk/help/covid-19

 

We can help too

You can also speak to your landlord. Kingdom Housing Association has a partnership with the Fuel Bank Foundation to provide prepayment customers in crisis with energy top ups. We can also help you access specialist income maximisation and debt services.

If you are affected by the current crisis, Kingdom Housing Associations Tenancy Support Service are here to help. We have an Energy Advice Officer who can provide you with advice and support on accessing affordable tariffs and switching suppliers. We can also refer you for help with benefits, budgeting and debt.

You can email us directly at tssteam@kha.scot or leave a callback request for a phone call at 01592 630922 (Option 5)


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