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Energy suppliers are advocating for sustained and targeted financial assistance for vulnerable households amid rising gas and electricity prices.
Millions of households in England, Wales, and Scotland are experiencing a 2% increase in energy costs, effective Wednesday, as Ofgem’s latest price cap takes effect.
Campaigners warn that many will face hardship with another winter of elevated energy bills, compounded by a record £4.4 billion in customer debt to suppliers, according to recent official data.
The government has stated it is taking “urgent action” to provide support for vulnerable families during the winter months.
While some energy companies have established schemes for debt write-off or emergency voucher provision, the availability of such measures varies across the industry.
“The level of support [is] still insufficient for those that need it most,” noted Ned Hammond, a deputy director at Energy UK.
“The government needs to make swift progress to improve targeting and design an enduring support scheme that effectively addresses fuel poverty.”
Government officials highlight the extension of the Warm Home Discount to benefit recipients, offering a £150 reduction on winter bills for one in five households, financed through a levy on all bill payers.
“In the coming weeks, we will be announcing details of the biggest home upgrade programme in British history to improve up to five million homes, making them cheaper and cleaner to run,” stated energy minister Martin McCluskey.
The government has also pledged to lower household energy costs through investments in domestic energy production.
A pressing concern for households is the recently implemented 2% increase impacting millions of variable tariff customers in England, Scotland, and Wales. Fixed-rate customers will remain unaffected. Regulators and suppliers advise consumers to assess whether a fixed tariff offers cost savings and aligns with their individual circumstances.
Ofgem’s price cap establishes the maximum allowable charge per unit of gas and electricity. The increase from October to the end of December translates to an annual cost of £1,755 for a household with typical energy consumption, representing a £35 annual increase.
Individual households can estimate their specific change by adding £2 for every £100 spent on energy annually.
The bill increases are attributed to additional financial support through the Warm Home Discount, as well as expenses associated with balancing energy supply and demand, including the activation and deactivation of generators like wind farms.
Households are encouraged to safely manage their energy consumption during the colder months, a practice that has become commonplace for many in recent years.
Energy UK has emphasized the need for improved methods to identify households most in need of assistance.
The organization suggests that support should incorporate income, health, and energy consumption data, with tiered assistance providing greater relief to those facing the most significant challenges, funded through taxation.
A report by the trade body indicates that an annual investment of £1.5 billion could “close the fuel poverty gap completely,” saving households in fuel poverty an average of £400 per year.
Ofgem’s latest data, spanning April to June, reveals that over one million households lack a repayment arrangement with their energy suppliers, marking a record high.
Ofgem aims to create a Debt Relief Support Scheme, enabling suppliers to write off unrecoverable debt or offer “debt matching” based on customer payments. Funding for such a scheme would likely come from consumer bills or government sources.
As part of its plans, the regulator seeks to establish a streamlined and consistent service for households to access aid from charities and debt support agencies, ensuring that energy debt remains manageable.
An initial government reduction in winter fuel payment support for pensioners was subsequently reversed following public outcry.
Nine million pensioners in England and Wales with an annual income of £35,000 or less will now be eligible for the payment in the coming weeks.
Millions of homes face increased energy costs as colder weather approaches.
Homes may be damaged and experience power outages due to the rain and high winds brought on by stormy weather.
According to the University of Reading, students may not be aware of how much extra they are paying for unlimited energy.
Rachel Reeves, the Chancellor, will present her economic proposals in her second Budget on November 26.
The regulator investigated the company, which has 14,000 customers, for debt exceeding £3 million.
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