Martin Lewis gives three money saving energy bill tips
Energy prices are soaring for millions of households with Ofgem’s price cap increasing from £1,277 to £1,971 next month. Estimates suggest the rise will push the number of UK households in fuel poverty to 6.5 million.
It comes on top of rising inflation, a National Insurance hike and record fuel prices at the pumps. For some already struggling, the cost of living crisis is a source of shame, fear and uncertainty.
Nona, not her real name, managed to get back in the black after paying back £2,000 worth of debt to Scottish Power.
She had reached an agreement to pay £40 per month on a fixed rate tariff and was building up credit with her energy provider which she hoped would help her manage any future price rises.
But with the price of energy soaring beyond expectation, she now has to pay £68 per month from a monthly income of £1,200. Her rent alone costs just over £1,000.
Nona told Express.co.uk her situation forces her to eat food cold from a tin so she can afford to take a hot shower.
The energy price cap increases in April
Frost covers rooftops of houses in West Yorkshire
When the money runs out after paying her utilities bills, she relies on the support of her church and local food bank so she can eat.
She said: “I’m fearful about what is going to happen from April. The prices are going to hike up again and I’m dreading it.”
Help was at hand last year when Nona received £100 to help with her utilities bills from a Government grant disbursed by Christians Against Poverty (CAP), a charitable company providing debt help and advice.
CAP’s Director of External Affairs, Gareth McNab, said: “The cost of living is rising for everyone – but what is a squeeze for some, needing to cut back on luxuries or draw down on savings, is a crisis for many others.
“The cost of essentials – food, fuel and transport – is increasing far more quickly than we have seen in a generation, while incomes are even being cut for the poorest.”
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The Office of Gas and Electricity Markets (Ofgem) is raising its price cap in April
Pensioners protest over rising fuel prices at a demonstration outside Downing Street
He added that cutting the incomes of those reliant on social security cannot continue while costs are rising.
He urged the Government to act, recommending Chancellor Rishi Sunak could choose to boost social security at the Spring Statement to make sure it matches the current rate of inflation.
Suffering from osteoporosis, depression and anxiety, jobless Nona explained how she does not let friends come to her North London home because it is so cold. She uses a hot water bottle to keep warm.
The Government announced a £200 discount on energy bills this autumn for domestic electricity customers in Great Britain to be paid back automatically over the next five years.
A £150 non-repayable rebate for households in England in Council Tax bands A to D has also been introduced, and will come into force early next month.
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How the energy price cap has changed
But Nona was sceptical about the £200 energy bill rebate, which applies in England, Scotland and Wales.
She said: “This means I’m going to get into debt again. I don’t want to go back there. I don’t know how I’m going to survive. How am I going to pay that back?”
Nona, 56, urged utilities companies to join ministers and charities to get together to work on a better solution.
She said: “I’m very uncertain – fearful – about the future, and incredibly anxious. My rent is going up by £100. Energy is going up. I can’t afford to buy my own food.
“I’m embarrassed about my whole situation.”
A volunteer works with donated food items at the Trussell Trust’s Colchester Foodbank
CAP Energy Manager Paul Walmsley said: “This is a really difficult situation that will see us all paying more for our energy, but for those on a low income or already struggling in debt this will be devastating.”
He explained that CAP has seen demand for emergency energy fuel aid double on last year which was already at an increased level due to the impact of the pandemic.
Mr Walmsley said: “Sadly, we expect this rise to continue unless urgent action is taken to ease the impact of the increase in energy costs and wider inflation.”
He added that Government support will provide some relief to millions of UK households, but CAP is concerned the £9 billion package only covers half the energy price increase households are facing on average.
Mr Walmsley continued: “More assistance is needed to stop low income households falling into greater fuel poverty.”
CAP advises anyone worried about falling into energy arrears to contact their supplier in the first instance.
For those already in debt with energy or other arrears, CAP recommends seeking free debt help from Christians Against Poverty offer free debt or other charities offering free, reputable advice.
Fuel poverty charity National Energy Action (NEA) Director of Policy and Advocacy Peter Smith said: “The price hike in October was bad enough, but April’s rise is going to be devastating for the poorest households.
“We estimate [it] will push the number of households in fuel poverty in the UK up to 6.5 million.”
He added that the charity’s advice workers are seeing some heart-breaking situations.
Mr Smith added: “People who were struggling to make the choice between eating and heating will now not be able to afford either.
“Unfortunately, the government’s recent package of support does not do nearly enough to help those households. There is however still time to get this right before April’s hike and the further rises expected in October.”
The latest fuel poverty statistics show that an estimated 13.2 per cent of households were in fuel poverty in 2020. However, NEA warns that the real level is much higher.
This is in part because official fuel poverty statistics published by the Department of Business, Energy and Industrial Strategy (BEIS) lag behind two years and relate to the number of fuel poor households in 2020 – at least 24 months before current increases in energy prices.
UK-wide legislation in 2000 defined a person living in fuel poverty as a member of a household living on a lower income in a home which cannot be kept warm at reasonable cost.