Energy experts call for more support as households face ‘most expensive winter in history’

Experts have called for more support for households facing “the most expensive winter in history” as the UK Government revealed how its £400 energy costs support will be paid.

The money, which is part of a package announced in May this year, will come in the form of a monthly deduction from bills over six months for some 29 million households.

Customers will see £66 taken off their energy bills in October and November, and £67 each month from December to March, the Government said.

But one energy company boss said households could burn through that money in just a few days.

The payments to help households deal with spiralling energy  bills were announced by then chancellor Rishi Sunak in May.

He also promised extra help for the poorest households.

That support came in response to predictions that energy bills will rise to £2,800 for the average household in October.

However, since then the forecasts have become even bleaker.

Consultancy BFY believes bills could hit £3,420 per year from October, before rising further in January.

January’s forecast would be nearly twice as high as the current price cap.

On Friday, Richard Neudegg, director of regulation at Uswitch, called for the £400 to be increased to at least £600, and for payments to vulnerable households to rise from £650 to £950.

Under-estimation

“The Government did the right thing by stepping in with wide-reaching support to try to help ease the blow. However, this support now looks like a severe under-estimation of what consumers need,” he said.

“Households need clarity to help them plan for the most expensive winter in living memory.”

The chairman of energy company Utilita said the worst is “potentially yet to come”.

Derek Lickorish told BBC Radio 4’s Today programme that special focus is needed on the poorest households.

In 2020 £50 of energy would have lasted 12 days, he said. Now customers could burn through that amount in three-and-a-half days.

He called for the introduction of a social tariff which discounts bills for those worst off.

UK Business and Energy Secretary Kwasi Kwarteng said: “People across the country are understandably worried about the global rise in energy costs and the pressure this is placing on everyday bills.

“While no government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families over the colder months.”

Those with a domestic electricity meter who pay for their energy via standard credit, payment card or direct debit will receive an automatic deduction from their bills.

Pre-payment meters

Traditional pre-payment meter customers will be provided with energy bill discount vouchers in the first week of each month, issued via SMS text, email or post.

The new Chancellor Nadhim Zahawi said the discount is “part of our £37 billion of help for households, including 8 million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living”.

The announcement comes after consumer champion Martin Lewis said the Prime Minister and Conservative Party leadership contenders Liz Truss and Rishi Sunak need to agree a package to help consumers.

He said Boris Johnson’s “zombie government” is failing to address the crisis caused by rising energy bills and warned that decisions on support cannot be delayed until his successor is in office.

Money Saving Expert founder Mr Lewis said households will start receiving notice of increased bills before the Tory leadership contest concludes, ahead of the energy price cap rising to £3,500 or more in October.

Low-income households

Last Week the Welsh Government announced more than 400,000 low-income households in Wales will be eligible for a £200 payment to help keep their homes warm this autumn and winter.

The Welsh Government is investing £90m in its Fuel Support Scheme as a result of the impact the the cost-of-living crisis is having on those struggling to pay their energy bills.

Last year around 166,000 households on universal credit, legacy means-tested benefit and working tax credits benefitted from the £200 Winter Fuel Payment.

The extension of the fuel support scheme for next winter will mean nearly 200,000 more households on child tax credits, pension credits, disability benefits, carers allowance, contributory benefits and those receiving help from the Council Tax Reduction Scheme to pay their council tax bill will now be eligible.