Struggling With Energy Bills? So Are Suppliers
It’s recently been revealed that energy companies might be in danger of going bust. Fortunately, the watchdog is considering raising annual household bills by £17 to prevent this from happening. Ofgem looked at market figures suggesting that energy debts rose to £2.6 billion in the summer. After the explosion of energy prices, huge cost of living pressures and alleged profiteering, the increase would not be welcome news.
When Would the £17 Increase Happen?
Before anyone starts to panic, Ofgem has only suggested this as a measure. If it were to be implemented, it wouldn’t happen until April 2024. The most recent price cap was put into effect for the winter, which lowered prices slightly from £1,976 to £1,834 a year, for the average household. As such, the supposed £17 increase would not happen until the winter was over.
“We know that households across the country are struggling with wider cost of living challenges, including energy, so any decision to add costs to the price cap is not one we take lightly.”
Tim Jarvis – Ofgem Director General for Markets
Despite this, there is a balance between households struggling and energy suppliers going bust. Unrecoverable debt is mounting, which pushes the costs onto customers that are already able to pay. As such, Ofgem stressed that if the rise were not to happen, UK households could be worse off with higher prices and worse service.
The precedent they are relying on was at the start of the energy crisis, where around 30 energy suppliers went bust in 2021. Energy costs rose by around £82 a year to ensure household supplies weren’t cut off. Shortly after, at the beginning of 2022, the Russian invasion of Ukraine sent wholesale energy prices soaring.
Households are Struggling in Winter
Now that we’re heading into winter, various charities and bodies are becoming increasingly worried about the number of households unable to afford heating. This year, there will be no widespread government support, unlike the £400 Energy Support Scheme that was issued last year. What’s more, with water bills set to rise next year as well, the most vulnerable households will be squeezed even tighter.
Energy Support from the Government
For the most vulnerable, the government has issued a £150 discount on energy bills. The Warm Home Discount Scheme. The one-off discount would be paid on your electricity bill between October 2023 and the end of March 2024.
If you’re an eligible household, the discount will be applied automatically; you don’t have to apply for it. You may receive a letter in the post confirming your eligibility at the start of next year. For dual fuel households, you could receive this discount on your gas bill instead, but you’d have to get in touch with your energy provider to ask.
Despite Citizens Advice calling on the government to intervene and rollout a winter energy bill scheme immediately, they have instead opted to pay a discount just before the potential £17 increase comes into effect next year. As Sadiq Khan, Mayor of London, said, if you’re struggling to pay your bills, there is support available. You should first contact your energy supplier, if you haven’t already.
How to Save Money on Bills
Before the very coldest temperatures reach the UK, there are ways in which you can save money on your energy bills.
Loft insulation is one of the easiest ways to keep in a lot of heat
Draught-proofing your home can reduce blasts of cold air from the outside, especially on windy days
Solar panel grants could be available to you, if you qualify
You might be able to receive a free boiler through ECO4