Ofgem, energy suppliers, consumer experts and charities have urged the UK Government to do more to help millions of households this winter cope with the soaring cost of energy bills. Last week, Ofgem announced that the energy price cap is set to rise by 80 per cent by October, pushing the average household’s annual bill up from £1,971 to £3,549.
Chancellor Nadhim Zahawi has said he is working “flat out” to draw up options for a plan of action for the next prime minister so they can “hit the ground running” when they take office on September 5. But the announcement on Friday left many people confused and anxious about paying bills once the colder weather sets in with a new poll showing that nearly one in four adults plan never to turn their heating on this winter.
Adam Scorer, Chief Executive at National Energy Action appeared on Saturday’s edition of BBC Radio 4’s consumer affairs programme, Money Box Live, to answer questions from people worried about the new price cap.
He gave a brief overview of the support available through cost of living payments and the £400 energy rebate coming in October, but offered a key piece of advice for anyone worried about being pushed into debt because of soaring energy bills.
Adam explained: “There are some energy efficient tips that people can find online but the single-most important advice I think you can give is that if you think this looks like it’s going to drive you into debt or make you vulnerable to debt, get in touch with your supplier.
“They have an obligation, regulatory requirement to find a pathway to repay that meets your ability to pay.”
He added: “It’s not the advice you want to give but it’s what you can do if you find yourself in debt to your supplier.”
Jen from Gourock contacted the programme to ask about her credit balance with her energy supplier. She lives in a two-income household but her supplier went bust last year and they were moved on to a standard tariff with a new energy firm.
Jen wanted to know how to go about getting more accurate energy bills from her supplier to ensure her Direct Debit were not inflated and creating a growing pot of credit. She asked Adam if she should cancel her Direct Debit agreement and pay in another way.
Adam pointed out that the credit Jen has now will probably be eaten up by the price cap in October, but added that customers are always in a “position to ask for clarity” about why Direct Debits are set the way they are.
He also said: “You can challenge and you can ask for a refund if you think it’s too excessive. If you really want control you can always have the option of going to pay by standing credit - so you pay where you get your monthly or quarterly bill.”
However, in the same way Martin Lewis recently addressed this option, Adam also urged caution.
He explained: “Make sure you’ve got meter readings so you’ve got an accurate account of how much energy you’re using and not an estimated one.
“As with prepayment meters, the unit cost is higher for standard credit than Direct Debit because Ofgem regards the administration of it to be higher and as with prepayment meter users, you will pay for what you use, when you use it, so you need to be ready for a very big bill - especially in January.”
Adam also pointed out that while the bills will be higher in the colder months, they would be lower in the summer and urged anyone considering the switch to think about the implications of paying much higher costs each month.
You can listen to the full Money Box Live Q&A energy special on the BBC Sounds app or online here.
To keep up to date with the latest energy news, join our Money Saving Scotland Facebook group here or subscribe to our newsletter which goes out three times each week - sign up here.
READ NEXT
Full details on £400 energy rebate monthly discounts starting in October
- Five ‘energy-draining’ household appliances and how much they add to your bill every day
People on a low income may qualify for cash support from their local council
DWP loans worth up to £812 for people claiming certain benefits can be repaid over two years
Low-income families urged to apply for one-off £267 child payment before schools go back
