Many people are currently struggling with spiralling living costs, driven by record-breaking wholesale gas prices. To help shield consumers from the October price cap rise, the Government announced that they will be implementing an ‘energy price guarantee’ – freezing the price that consumers will pay per unit of gas or electricity for the next two years. This means that the average household will pay about £2,500 on their energy bill. All households in Great Britain will receive this support, in addition to any other part of the Energy Bills Support Scheme that they are eligible for.
While this support is welcome, it is not likely to go far enough as the average bill under the energy household guarantee will still be double what consumers were paying a year ago, meaning that many will still struggle to make ends meet.
It is important to note that the £2,500 figure is the average annual cost calculated for an average household and not the exact amount that each household will pay.Higher usage households will see much less benefit from the price freeze, as they will still need to use more energy and so their bill is likely to exceed £2,500 a year. This will particularly affect customers who are disabled, older or who live in inefficient homes.
With the price cap currently set over £500 below the energy price guarantee, millions of households are already struggling with their energy bills. In the context of other rising living costs, it’s unlikely that the support provided will be enough for those on lower incomes.
Millions of people will start to be pushed into hardship and debt as the October price rise kicks in. The impact of high prices will be felt even more acutely by prepayment customers who are at risk of being off-supply if they can’t top up. The £400 of government support will be paid directly to your supplier and you should see it deducted off your monthly bill. If you are on a smart prepayment meter it may be credited directly to your meter. If however your meter cannot accommodate this, you should receive a voucher from your energy supplier. This may be a paper voucher, a text message or an email. Beware of scams that are asking for your bank details to pay out the £400. You should not be asked for your bank details in order to receive this support.
Suppliers have obligations to support struggling customers, and many will need extra help this winter.
To prevent a debt and disconnection crisis, and to make sure customers can get the support they need, Citizens Advice is calling on suppliers to:
• Reassess whether existing debt collection and Additional Support credit policies are meeting customer needs.
• Provide customers with the means to lower their debt repayment amounts or to pause their repayments, if they are struggling to pay.
• These repayment options should be included in app functionality and on suppliers’ websites, and shouldn’t only be accessible via a lengthy telephone conversation. Suppliers should also offer a free telephone number, for customers who are struggling to pay which is clearly advertised.
• If a customer is vulnerable and is on a prepayment meter, then Additional Support Credit requests should not be refused and particularly they should not be refused at all over winter if it means that the customer will go off supply.
• Where additional credit is repeatedly requested, suppliers should consider whether it is still safe and reasonably practicable for that customer to have a prepayment meter.
• If a customer is struggling to make payments towards their bills or any debts, then suppliers should not forcibly install smart or standard prepayment meters in an attempt to recover their debt.
• Suppliers should focus on supporting the customer to pay what they can of their ongoing usage, to prevent them from going off supply.
If you find yourself unable to pay your energy bills or to top up your meter look on our website for information on what you can do or contact us to see if we can help.
Details can be found on our website www.canosn.org.uk.
