Energy prices are rising, but there is help and support available.
Why are energy prices rising?
Energy prices have been rising worldwide for a variety of reasons. In 2021 a cold winter in Europe put pressure on supplies, so there is less gas stored globally than normal. There’s also been increased demand from Asia, and around the world as economic activity increased after lockdowns. These have combined to push up gas prices. The biggest driver of energy price rises is unfortunately the Russian war against Ukraine, which has caused major disruption to global markets.
Will the UK have enough gas?
Yes - while global wholesale gas prices are currently high the government are confident that the UK’s security of energy supply is secure now and over the winter.
What happens if my supplier goes bust?
If your supplier stops operating, Ofgem – the independent energy regulator - will automatically switch you onto a new supplier so there will be no interruption to your supply of energy. There is a well-planned system in place to protect households and ensure your gas and electricity keeps running.
Will my bills go up if that happens?
All customers will still be protected by the energy price cap. This limits suppliers on how much they can charge for standard variable rates.
The energy price cap will go up on 1st October – will it go up again soon?
Ofgem has announced the energy price cap will increase to £3,549 per year for dual fuel for an average household from 1 October 2022. The Energy Price Cap is reviewed twice a year based on the latest estimated costs of supplying energy, and the next time the price cap is due to be updated is January 2023.
What should I do if my supplier goes bust?
You will be moved to a new supplier, but this may take a couple of weeks. Citizens Advice have lots of information about what to do – including taking meter readings and how to get back any money you are owed https://www.citizensadvice.org.uk/consumer/energy/energy-supply/problems-with-your-energy-supply/your-energy-supplier-has-gone-bust/
What if I can’t afford my energy bills?
Contact your supplier as soon as you can if you are worried about paying your energy bills. They have to work with you to agree on a payment plan you can afford under Ofgem rules. This includes reviewing a plan you have agreed on before.
You can ask for:
- a review of your payments and debt repayments
- payment breaks or reductions
- more time to pay
- access to hardship funds
- Priority Service registration – a free support service if you are in a vulnerable situation.
The Government have announced several things that are going to help with the rising costs of energy bills.
A new Energy Price Guarantee The Energy Price Guarantee will reduce the unit cost of electricity and gas so that a typical household in Great Britain pays, on average, around £2,500 until April 2023. https://www.ofgem.gov.uk/information-consumers/energy-advice-households…
The consumer saving will be based on usage, but on average usage, a household will save £1,000 a year (based on current prices from October). Energy suppliers will be fully compensated by the government for the savings delivered to households.
- Your actual bill and savings could be higher or lower depending on the size of your home, how well it is insulated, how many people live there and how much energy you use.
- £150 of this £1,000 a year savings will be delivered by temporarily suspending environmental and social costs (including green levies) from being passed onto consumer bills. These costs will be transferred to the government, while customers still benefit from the low-carbon electricity generation. Payment of the Warm Home Discount will be unaffected.
- This is in addition to the £400 Energy Bills Support Scheme, which will be paid, in Great Britain, in 6 monthly instalments from October. Households in Northern Ireland will also receive a £400 discount on bills through the Energy Bills Support Scheme.
- The most vulnerable UK households will also continue to receive £1,200 of support provided in instalments over the year, through discounts to Council Tax and Cost of Living payments for those in receipt of certain benefits.
- Households who are unable to benefit from the full extent of the Energy Bills Support Scheme and/or Energy Price Guarantee scheme (for example, households not on standard gas/electricity contracts) will receive equivalent support.
Vulnerable households can also find financial support
There are a number of targeted schemes including the Winter Fuel Payment and Cold Weather Payments. Additionally, most energy providers offer a Warm Home Discount to those eligible.
The Government have announced a new £500 million scheme for vulnerable households this winter.
Vulnerable households across the country will be able to access a new £500m support fund to help them with essentials over the coming months as the country continues its recovery from the pandemic. This will be administered through local authorities and will help to cover the cost of essentials.
More details will be forthcoming in due course, but you can read the announcement here.
You might be eligible for further help to pay your bills:
Winter Fuel Payment
If you were born on or before 25 September 1956 you could get between £250 and £600 to help you pay your heating bills. This is known as a ‘Winter Fuel Payment’.
The amount you’ll get includes a ‘Pensioner Cost of Living Payment’. This is between £150 and £300. You’ll only get this extra amount in winter 2022 to 2023. This is in addition to any Cost of Living Payment you get with your benefit or tax credits.
Cold Weather Payment
You’ll get a payment if the average temperature in your area is recorded as, or forecast to be, zero degrees celsius or below over 7 consecutive days.
You’ll get £25 for each 7-day period of very cold weather between 1 November and 31 March.
Warm Home Discount Scheme
You could get £140 off your electricity bill under the Warm Home Discount Scheme. The money is not paid to you - it’s a one-off discount on your electricity bill, between October and March.
You may be able to get the discount on your gas bill instead if your supplier provides you with both gas and electricity. Contact your supplier to find out.
The scheme will reopen again in November 2022.
Other sources of help
The British Gas Energy Trust help people in fuel poverty. You do not have to be a British Gas customer to qualify. More here.
Eon also provide support for existing customers: https://www.eonenergy.com/more-for-your-home/energy-fund.html as do
Octopus energy advice https://octopus.energy/blog/struggling-to-pay/
Ofgem have lots of help and advice for households, including how to make a complaint about your energy supplier, and what to do if you can’t afford your energy bills https://www.ofgem.gov.uk/information-consumers/energy-advice-households
Age UK has a good explanation of what happens when your energy supplier goes bust, and sources of support for paying energy bills. https://www.ageuk.org.uk/information-advice/money-legal/debt-savings/energy/changes-to-energy-prices/?utm_source=twitter&utm_medium=social&utm_campaign=energy&utm_content=supplier_bust
Simple Energy Advice has lots of links and tips https://www.simpleenergyadvice.org.uk/pages/help-paying-energy-bills
The Energy Saving Trust have lots of tips on how to reduce your energy usage https://energysavingtrust.org.uk/energy-at-home/
The Money Saving Expert website also has lots of useful advice https://www.moneysavingexpert.com/energy/
*(Page updated 19th October 2022)