Energy bill discount must be increased to £1,000 to keep up with price cap rise, experts warn

THE Government is being urged to increase the energy bill discount by at least 150% or risk pushing millions into hardship.

Consumer group Which? is calling on the Government to do more to help UK households with their energy bills this winter.

Which? said the Government must increase the discount from the current level of £400 to £1,000.

That would see the monthly discount increase from £67 to £167 per month from October to March.

It comes the day before regulator Ofgem will reveal exactly how much bills will go up by this winter.

The new energy price cap is being announced tomorrow, August 26, and will come into effect on October 1.

It is expected to take the average household bill to more than £3,500 a year - with some experts forecasting bills could hit £6,000 next year.

Which? said the current package of help - announced by former Chancellor Rishi Sunak back in May - was inadequate to protect living standards for those on the lowest incomes and would lead to considerable financial and social hardship.

Child Poverty Action Group has also called for more assistance for struggling families - it said low-income households will have a £1,000 shortfall for energy costs alone in the year to April 2023.

CPAG said typical energy costs are around 30% for families with children, than households without.

It wants to see more targeted support for families to reflect their additional costs.

CPAG chief executive Alison Garnham said: “With a £1,000 shortfall just for energy bills, many struggling families will fall through the ice this winter unless the Government makes more help available fast. 

"Over the next few months families will need extra support that covers their costs and reflects family size, and social security must rise to match inflation from April. 

"Four million children are already in poverty with many others now perilously close to it.  Leaving their families to sink cannot be an option.” 

More help is needed

When the Government first announced its financial support package in May, the energy price cap was predicted to reach around £2,800 in October.

Analysts Cornwall Insight now predict that average energy bills will increase to £3,554 in October and hit £4,650 in January.

It is estimated that two-thirds of UK households could be pushed into fuel poverty by January.

Ovo Energy boss Stephen Fitzpatrick has warned that some of the hardest-up households will see bills quadruple due to soaring costs

Which? said even more must be done to help vulnerable households. As well as increasing the discount by 150% it wants to see an extra £150 payment made to some people.

Under Rishi's package of help, almost every household in the UK will get a £400 discount on their energy bills this winter.

The money will be applied in six monthly instalments, starting in October.

Millions more people will get extra help - including a £650 payment for those on certain benefits such as Universal Credit, £150 for those with disabilities, and £300 for pensioners.

But as energy costs continue to soar, there are fears the measures will not be enough.

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%, 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.”

What to do if you're worried about energy bills?

Don't panic - there is help available.

Experts are urging people not to stop paying their bills - this is incredibly risk and could result in bailiffs coming to your home or you being put on a pre-payment meter.

If possible, don't cancel your direct debit - you'll often get a discount for paying this way.

Be sure to submit a meter reading regularly so you're only paying for the energy you actually use. You can ask your supplier to reduce the monthly payment if you think it's too high.

Speak to your supplier if you're struggling. Some providers have hardship schemes which offer grants to those in energy debt.

Your supplier should also help you come up with a manageable repayment plan based on what you can afford.

Find out if you're eligible for any other help - some local councils are giving out cash to cover the cost of essentials through the Household Support Fund.

We've rounded up some of the other energy help that's available including welfare assistance schemes and bill discounts.