The Government must increase its energy bills discount by at least 150 per cent, Which? has warned.
It comes as the price cap is set to rise yet again with the figure being announced on Friday August 26, with the financial experts telling bill payers an 'incredibly challenging' period could lie ahead for millions. The consumer comparison website has said that energy experts predict that the price cap for October will be £3,550 and then reach £4,000 by January after Ofgem changed the way they adapt the price cap to every three months.
Because of the rising costs, Which? have said it could risk putting millions of households into financial distress with the watchdog saying that the Government’s financial support for all households must increase from the current £400 to £1,000 – or from £67 to £167 per month from October to March – following soaring energy price cap predictions. When the Government first announced its financial support package in May, the energy price cap was predicted to reach around £2,800 in October - less than what is currently predicted with Analysts Cornwall Insight now forecasting the average energy bills will increase to £3,554 in October and hit £4,650 in January.
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Despite calling for an increase of 150 per cent, Which? have said not even this may be enough for households such as families on the lowest incomes stating the Government must also provide them with an additional one-off minimum payment of £150 to ensure the most vulnerable have the support they need. PA reports that the additional support would only be a temporary solution until March, when energy prices are predicted to hit £5,341 for April and remain high throughout 2023.
Which? is now calling on the Government and Ofgem to undertake an immediate review of retail energy pricing – including the price cap – and rapidly improve the insulation of homes to reduce costs, lower the reliance on gas and support the transition to net zero.
Rocio Concha, Which? director of policy and advocacy, said: “With energy bill predictions continuing to spiral, the Government must increase the Energy Bills Support Scheme by at least 150 per cent, or risk pushing millions of households into financial distress this winter. While increased support will provide relief for many, it is not a long-term solution.
"The Government and regulator must urgently undertake a wide-ranging review of retail energy pricing – including the price cap – to build a fair and affordable system for consumers. The Government must also develop a programme to urgently improve the insulation of homes – as this will help to reduce people’s energy costs for years to come.”
Labour spokesperson Pat McFadden added: “With each passing day and each new report, the huge scale of the energy price challenge facing households becomes clearer. People will struggle to pay for basic necessities and the Conservatives are scrambling around with no solution in sight.
“Labour has a fully-funded plan to make sure households don’t pay a penny more for their energy this winter, saving £1000 on energy bills.”
A Department for Business, Energy and Industrial Strategy spokesman also said: “We know the pressures people are facing with rising costs, which is why we are taking direct action to help households with £37 billion worth of support. In addition to providing eight million of the most vulnerable households with £1,200 extra support this winter, we are also investing £6.6 billion in this parliament to improve energy efficiency as part of the Government’s ‘Help to Heat’ programme which is helping make households across the country cheaper to heat.”
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