The announcement of an 80% increase in the energy price cap last week has left millions of people wondering how they will cope this winter. Last Friday regulator Ofgem announced the cap would rise from from £1,971 to £3,549 from October 1, this increase coming on top of a 54% rise already introduced in April this year.
The changes have left millions of households already struggling to cope with rising costs worried about how they will pay their bills heading into the colder months, when more people tend to use their heating. You can read what the energy companies have said about price increases following the price cap change here.
The cap will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1, and will remain in place until December 31, when it will be adjusted again. Ofgem's chief executive Jonathan Brearley warned of the hardship energy prices would cause this winter and urged the incoming prime minister and new cabinet "to provide an additional and urgent response to continued surging energy prices".
Read more: Experts forecast when the energy price cap might actually go down
Birmingham Live reports that thousands of people on DWP benefits will escape the impact of the price cap rise, however. The department has confirmed that anyone who pays their energy bills via deductions from their benefits will not be affected by the price cap changing. Under the DWP's fuel direct policy, claimants who are in debt with their gas and electricity can face deductions that come straight out of their benefit payments to clear off the arrears. Previously, suppliers could also demand extra amounts to cover a claimant's current energy usage but this has been stopped because of the cost of living crisis.
The rule applies to those on the following benefits:
- Income support
- income-based jobseeker’s allowance
- Pension credit
- income-related employment and support allowance
- Universal credit
The DWP said in a new update: "From April 1, 2022, to April 1, 2023, DWP introduced a temporary change to fuel direct to protect claimants given unprecedented energy prices. During this period, energy suppliers can no longer request new deductions or increased payments from a claimant’s benefit to pay for ongoing fuel consumption.
"For claimants who pay for their ongoing fuel usage directly from their benefits, the amount they pay was not automatically increased if their bill went up in April, 2022, and will not automatically increase when the price cap changes in October, 2022.
"If claimants use fuel direct and feel they are able to pay their increased bills, they should contact DWP to amend their existing arrangement. Universal credit claimants can use their universal credit journal to make this request or call 0800 328 5644. Income support, jobseeker's allowance and employment and support allowance claimants can call 0800 169 0310. For pension credit, claimants can call 0800 99 1234."
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