A leading Newcastle charity has called for the Government to reconsider its plans to raise the Energy Price Guarantee (EPG) by £500 for the average household in April, amid fears that more families will be plunged into poverty.
Citizen's Advice Newcastle estimates that the number of households unable to afford their energy bills will double, from one in 10 people to one in five when the Government's support to keep average household energy bills at £2500 a year rises to £3,000 a year, leaving struggling families with an extra £500 to find to keep their homes warm.
The news comes as Ofgem today announced its energy price cap would be set at £3,280 from April 1, but although customers will pay less than that under the EPG, Citizens Advice Newcastle has called on the Government not to allow bills to rise further in April, and to keep the energy price guarantee at £2,500 for the average household.
The EPG was introduced by the Government in October 2022 as a measure to limit how much the average household in the UK will pay each year for gas and electricity amid the cost of living crisis. The Government subsidises the cost of energy above the £2,500 average cost, but this is due to increase to £3,000 from April 1.
“Today’s Energy Price Cap will largely be irrelevant to billpayers as the Government’s Energy Price Guarantee caps the amount per unit of energy that people pay, " said a Citizens Advice Newcastle spokesperson. "But the average amount that people will have to pay will go up to £3,000 per year from £2,500 and the monthly support for all households that totals £400 will also cease. This is already unaffordable for many of the families that we advise each day and we are especially worried about those who are particularly vulnerable and those on prepayment meters who have to pay for their energy before they use it."
The charity has previously warned of its fears that people could die in their cold homes if they could not afford to top up their meters. "The E is £2,500 for an average home but the message we are getting is that this is massively unaffordable for some people, who are taking desperate - and dangerous - risks to keep warm," said the spokesperson.
"In winter 20-21, it is estimated that 6,000 people in England died as direct result of their homes being too cold, and energy costs then were around half of what they are now. At Citizens Advice Newcastle, we have seen more people who can't afford to heat their homes last year than the previous five years combined. It's shocking and desperate and we are worried that people are going to pass away simply because their homes are too cold."
Prepayment meters are widely seen as disconnection by the back door as they can force struggling families to cut their own supply or 'self-disconnect' if they have no funds to top up the meter. Ofgem earlier this month ordered energy suppliers to halt the practice of forcing customers to have prepayment meters fitted against their will if they have fallen into debt. The intervention came after an investigation by The Times, which saw some debt collectors working on behalf of British Gas were allegedly breaking into people's homes to install prepay meters and ignoring signs of extreme vulnerabilities. The ban will end on March 31.
Ofgem chief executive Jonathan Brearley said: “Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the Energy Price Guarantee. This means that on current policy bills will rise again in April. I know that for many households this news will be deeply concerning.
“However, today’s announcement reflects the fundamental shift in the cost of wholesale energy for the first time since the gas crisis began, and while it won’t make an immediate difference to consumers, it’s a sign that some of the immense pressure we’ve seen in the energy markets over the last 18 months may be starting to ease.
“If the reduction in wholesale prices we’re currently seeing continues, the signs are positive that the price cap will fall again in the summer, potentially bringing bills significantly lower.
“However, prices are unlikely to fall back to the level we saw before the energy crisis. Even with the extensive package of government support that is currently in place, this is a very tough time for many households across Britain.
“Where people are struggling, we urge them to contact their supplier to make sure they are getting all the help and support they are entitled to. We also think that, with bills continuing to be so high, there is a case for examining with urgency the feasibility of a social tariff for customers in the most vulnerable situations.”
Citizens Advice has published a guide to getting help if you are struggling with paying your energy bills, such as paying through your benefits or applying for extra help. It can be found here.
Now read:
- Cost of living: A five-step plan to get debt free in 2023
- Shock report finds 10 out of 10 mini plug-in heaters failed safety tests
- Council tax to rise from April 1 - check you're not paying more than you need to
- Buy-now pay-later firms to face clampdown under new rules in the pipeline
- Tumble driers, radiators and heated airers: Work out the best way to get your laundry dry amid the energy crisis
