File photo dated 19/11/14 of a stock photo of an elderly lady with her electric fire on at home. Urgent calls have been made to increase support for older people on low incomes after a survey found almost all its respondents were worried about paying bills next month. Issue date: Tuesday March 15, 2022.
Millions of households are bracing themselves for higher energy costs this winter, despite Ofgem’s reduction of the price cap on bills.
Experts warned the reduction of government support and a small increase in the standing charge would hike bills for some.
Energy regulator Ofgem said the new cap on a unit of gas and electricity would reduce average bills to £1,949 from 1 October, from £2,074 per year.
The average customer with a prepayment meter will also see their bills fall to £1,949 per year.
But while this looks, on the face of it, like good news for households, the lack of government support this winter will actually result in higher bills for many.
Last winter the typical household would have paid £2,500 per year due to the Government’s Energy Price Guarantee.
In addition, each household’s bill was reduced by between £66 and £67 per month between October and March due to a separate government grant.
Dan White told TLE that despite the energy price cap his bills remain too high for his daughter’s life-saving equipment and fears that disabled households in particular will bear the brunt.
He said: “The energy price cap will make no difference to the struggles within our household this winter. We’ll be forced to look at the array of our daughter’s essential disability equipment and decide what we can get away with not charging up.
“There seems to be a lack of empathy for families like mine with a disabled child, a lack of wanting to understand the sheer financial horror show we are living under.
He added: “The financial aid from the government has not increased. How will we survive this winter trying to keep our daughter healthy? In short, we won’t be able to.”
Research published by Scope in March last year revealed that disabled people are more than twice as likely to have a cold house, with more than 76% having to cut household spending amid rising living costs.
A survey of more than 1,000 disabled adults in 2022 found that two thirds had seen energy bills rise in the past three months, with 48% of those saying that said increases had a worsening effect on their health condition.
Robin Taylor who is currently on a smart meter with Scottish Power told TLE his energy bills have increased four-fold over the last year and is concerned they will rise further.
He said: “I’m concerned as it will mean I’ll have less money to work with for food, so I’ll have to use the microwave more often. It will definitely be a struggle.
“I’m more concerned about the vulnerable people who will do doubt be freezing in their homes because they’ve been forced to make a choice between heating and eating. We deserve a better solution that will make this situation better.”
Government statistics show that 3.26 million people in England were living in fuel poverty in 2022, but charities believe this is a significant underestimate.
According to National Energy Action 6.7 million people were living in fuel poverty as of February.
Meanwhile, analysis by the Resolution Foundation reveals nearly half (47%) of the poorest tenth of England households are set to face higher bills this winter.
Jonny Marshall, an expert at the Resolution Foundation, estimated 7.2 million households will face higher bills between October and March.
He said: “The end of the £400 universal payments and rising standing charges mean that over one-in-three families across England will face higher bills this winter than last.
“With almost three million households set to see their bills rise by over £100 – at a time when inflation is still sky high – the Government must up its game in providing longer-term support for hard-pressed families with a new social tariff for energy bills.”
Citizens Advice head of energy policy Gillian Cooper said targeted support for households would be desperately needed.
She said: “The next few months will push households like these over the edge. Our data suggests it will be as bad, if not worse, than last winter.
“Government must step in quickly with more targeted support for the households who need it most.”
The announcement has also raised the issue of whether the price cap is suited to the job it is now doing, with Ofgem itself questioning the policy’s effectiveness.
It added: “While the price cap has protected households from the full extent of volatility and surges in wholesale prices over the last two years, it was originally introduced by the Government to protect the minority of consumers who did not switch rather than to cover the vast majority of consumers, as it does now.
“It is a blunt tool and in the current market it has costs as well as benefits. It’s important to look at alternative models to examine whether they could work better with the current volatile market and the move to net zero.”
Related: As Brits face highest energy bills on the planet, EU nations bring in price cap to shield consumers
