This winter fuel 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. A cold winter in Europe last year 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 - since January the price has risen 250%.
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 went up on 1st October – will it go up again soon?
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 April 2022 which means customers who it protects needn’t worry about it increasing before then.
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.
- Firstly, all domestic energy customers will receive an upfront discount on their energy bills worth £200. This discount will be applied on electricity bills from October later this year. This will then be repaid over time, with a levy of £40 added to electricity bills for the following 5 years. This is not a personal loan, and will not affect your credit rating in any way.
- Secondly, households in council tax bands A to D will receive a £150 council tax rebate in April. This covers around 80% of homes in England, and makes sure that help is targeted to households that particularly need help. This will happen automatically for people who pay by direct debit, but does not apply to second homes, or empty properties. This does not have to be paid back.
- Anyone not eligible for the council tax rebate will be able to access support through their council, with councils being given £144 million of discretionary funding for this. This fund can also be used for people on lower incomes living in Band E-G properties.
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 26th September 1955 you could get a payment of £100-£300 towards the cost of your energy bills. There are full details of eligibility and how to apply here.
Cold Weather Payment
You might be able to get a Cold Weather Payment if you get support for mortgage interest, or certain benefits including income support, job-seekers allowance or pension benefit. You get a payment if the weather is on or below freezing for 7 consecutive days. Cold Weather Payments can start from 1st November, and you can get £25 per cold week.
Warm Home Discount Scheme
The warm home discount scheme could get £140 off your electricity bill for winter 2021 to 2022. The scheme opens on 18 October 2021.
The money is not paid to you - it’s a one-off discount on your electricity bill between October and March. You might be eligible if you are on pension credit, or on a low income. More details here.
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/