Fuel energy bills are causing increasing stress on households.With the ‘Big Six’ energy providers bumping up prices, more people are admitting to being behind with their gas and electricity bill payments.
Households are increasingly finding it difficult to stay on top of their fuel bills.
One debt help charity said, ‘it wants to see more utility companies establish flexible repayment schemes, as well as sharing effective good practice on working with people who are struggling to pay to minimise their costs.’
Worryingly, there has been a resurgence in the number of people using high cost credit companies such as payday lenders to try and keep up with household bills.
1 in 10 households suffer fuel poverty.
Government data reveals that one in ten households suffer fuel poverty.
Some 11.1% of English households, 2.55 million, faced heating bills that pushed them below the poverty line in in 2016, the most recent year for which data is available.
The levels of fuel poverty are highest in the private renting sector. Households in this sector who are facing high bills and low incomes were almost a fifth of households (19.4%). Here, households are struggling with bills and difficulty in meeting the costs is more acute.
Elderly people ration heating.
Last winter saw 3 in 5 elderly people saying they will ration their heating amid fears over high energy bills.
The survey said as many as 2 in 5 or 42% would also consider cutting back on food in order to meet the cost of heating their homes.
The survey of 2,000 people aged 65 and over found nearly half (46%) feared the cold snap would increase their bills. 54% worried their income or pension would not be enough to cover the cost. A fifth (22%) admitted they would have to use their savings or credit. Some 61% admitted they cut down energy use during the winter.
Campaigners called for companies to pass on reductions in wholesale energy prices to consumers They warned many elderly people faced a greater risk of dying from the cold.
Caroline Abrahams, charity director at Age UK, said: –
“Many older people will be feeling anxious. Not least because high heating costs are prohibitive for many, resulting in large numbers of older people finding it virtually impossible to stay adequately warm.”
“The UK has an appalling record on cold-related deaths. With one older person dying every seven minutes from the winter cold. Even ’normal cold’ temperatures of around six degrees significantly raise the risk of life-changing health problems such as heart attacks and strokes.”
The research suggested the majority of elderly people relied on measures other than central heating when trying to keep warm. Including wearing more clothes, using draught excluders and hanging thick curtains.
Household fuel debt in UK stands at £1.09 billion.
Earlier this year the Citizens Advice Bureau, (CAB) estimated that the total energy debt for households in the UK now stood at £1.09 billion.
Charities believe that some customers could potentially reduce their bills by switching. However, those facing financial difficulty may be nervous of the complexity of price tariffs. They are wary of being caught out and put in an even worse financial position.
‘Tariff Cap’ Bill to be in place for this winter.
Announced earlier this year by the government and set to be in place for this winter, will be new statutory powers handed to the Regulator OFgem. These powers have been dubbed a “nuclear deterrent” to end inflated prices.
The new bill, ‘The Domestic Gas and Electricity (Tariff Cap) Bill’ will put in place a requirement on Ofgem to cap standard variable and default energy tariffs. The cap will remain until at least 2020 to tackle the amount consumers have been overpaying the Big Six energy suppliers. The Competition and Markets Authority has put this at a whopping £1.4 billion a year.
Consumer groups say the price cap will make a real difference to the 12 million people stuck on the most expensive tariffs.
The new legislation should be operating next winter after receiving parliamentary approval.
“For far too long, older people, hard-working families and those on low incomes have been subject to rip-off energy tariffs. Our energy price cap will protect households from unfair price rises in time for this winter when people can feel the pinch more acutely.”
“We know that the cost of living is still a challenge for some families. Today marks an important step in helping people to keep more money in their pockets.”
Energy Secretary Greg Clark said: –
“This Bill, which delivers on our manifesto promise, is a necessary intervention to protect millions of energy customers who have been stuck on poor value deals and hit by unjustified price rises for far too long.”
“Switching will always save people money, but that doesn’t mean that customers should be punished for their loyalty.”
Citizens Advice chief executive Gillian Guy said: –
“The energy price cap will make a real difference to people’s lives. Capping prices for the 12 million people stuck on standard variable tariffs will stop firms overcharging customers who don’t or can’t switch supplier.
“Loyal customers have paid over the odds for too long. The passage of this Bill should mean the cap is in place for winter, giving much-needed protection to households across Great Britain.
“While the cap is a significant step towards a better energy market for consumers, it is also important that price protections remain in place for vulnerable people once the cap is lifted.”
Debt charities warn Households going back to high cost short term loans.
One Debt Charity reported “Our clients’ experiences show loud and clear that you’re more likely to get into debt if you are already on a lower income. Debt problems are often caused by the kinds of life shocks that can happen to anyone – job loss, ill-health or anything else that knocks your income off track.
“We saw some particular worries in the first half of this year in the form of a resurgence in high-cost short-term credit among our clients. More people behind on fuel bills, and a stubbornly high incidence of council tax arrears.”
“Council tax is especially concerning in light of mounting evidence that government debt collection practices are lagging far behind best practice.”