Worried about rising energy bills & suppliers going bust?

Jemma PEC

Posted on: 30 Aug 2022

By Jemma

Updated 30 August 2022

The news can be a bit overwhelming right now, headlines about gas shortages, price increases and energy suppliers going out of business are confusing. We want to explain a bit about what’s happening and let you know what help is available for you.

The price cap rose by 54% on 1st April 2022, and it was confirmed on August 26th that it will go up a further 80% on October 1st 2022. The price cap is a maximum amount that can be charged for electricity and gas standing charges and unit (kWh) rates. Remember: if you use more, then you will pay more.

On August 4th, it was confirmed by the energy regulator Ofgem that the price cap will now be updated every 3 months. In previous years, the price cap was updated every 6 months, on April 1st and October 1st. The price cap will now be updated every quarter. This more frequent update to the price cap will start with an update on January 1st, 2023. The January update is currently anticipated to be a 52% increase (26th August 2022 prediction, Cornwall Insight).

What does this mean for me?

    • If you are on a fixed rate, don't do anything. You will almost certainly be paying less than the price cap is rising to.
    • If you are on a standard variable rate because your deal has ended or your supplier went bust, this change will have affected you (from 1st April 2022).
    • If you are on a credit meter (which means you either pay by direct debit, standing order or when you receive a bill) and on the price cap, take meter readings regularly and submit them to your supplier so that an accurate bill can be issued.
    • If you are on a prepayment meter (meaning that you top up with keys/cards and have to put your cards, keys or codes into the meter), it is likely that the new rates will have kicked in on 1st April, no matter how much you have topped up in advance.

For detailed information on what this might mean for you, Martin Lewis has done some wonderful work around the issue, visit his website here.

If you are going to struggle to pay your ongoing energy bills, alert your supplier as early as possible.

What other help is there?

The Government has announced some measures to support people with price rises:

  • People who pay Council Tax with properties in Bands A - D will have received a one-off payment of £150 in May 2022. There is also a discretionary fund for those who do not meet the criteria (contact Plymouth City Council for further information). They have an information page about it here. The application for getting your rebate if you do not pay by direct debit is now open and you can apply on the previous link.
  • £400 energy grant: The government has now scrapped the £200 Energy Bills Support scheme. This has now been replaced with a £400 non-repayable grant. Full details are yet to be announced, but this is likely to be paid to credit customer’s electricity accounts in small instalments over 6 months, starting in October 2022. Prepayment meter customers will have the money credited to their smart meter or vouchers sent out to them.

Cost of Living Payments

  • £650 Low Income Benefits: If you were in receipt of any of the following benefits on 25th May 2022, you will receive the “Low income benefits Cost of Living Payment”. When and how this will be paid to you depends which benefits you receive. If you have a joint claim with a partner, the £650 payment will be split. More details and timescales can be found on the government website here.
    • Income-based Jobseeker’s Allowance
    • Income-related Employment and Support Allowance
    • Income Support
    • Pension Credit
    • Universal Credit
    • Child Tax Credit
    • Working Tax Credit
  • £150 Disability Benefits: If you were in receipt of any of the following benefits on 25th May 2022 – you will receive the “Disability benefits Cost of Living Payment”. You will receive this payment by September 2022.
    • Attendance Allowance
    • Constant Attendance Allowance
    • Disability Living Allowance
    • Personal Independence Payment
    • Scottish Disability Benefits
    • Armed Forces Independence Payment
    • War Pension Mobility Supplement

You could be entitled to both the Disability benefits AND the Low income benefits Cost of Living Payments, in which case you will receive a total of £800 spread over a period of time.

  • £300 Pensioner Winter Fuel Top-up: If you will be over state pension (aged 66 or above) between 19 and 25 September 2022, and as long as you meet certain other requirements (see the government website here), you will be eligible for a £300 “Pensioner Cost of Living Payment” top-up to your annual Winter Fuel Payment. This will be paid in November or December, typically through Direct Debit.

Full and complete guidance around these new Cost of Living Payments are yet to be published. The Money Saving Expert site has a useful question and answer section for all of the £400/Cost of Living payments info here.

  • Household Support Fund

The Citizens Advice Plymouth Household Support fund has now closed for new applications.

Plymouth Energy Community are working with Barnardo's and Food Plymouth to help low income families with children, to access a grant and other measures to help keep families warm this year. We are not taking any direct referrals as all our referrals are coming from our partners at Barnardo's and Food Plymouth.

Age UK Plymouth can support people of pensionable age (66+) with a potential one off £350 payment towards energy bills. You can enquire about this by calling them on 01752 256020.

  • Please speak to your supplier. There are several ways that they are now required to help since COVID-19 started. Visit our ‘Extra support from suppliers’ page for further information.
  • If you think your supplier is about to go bust, visit the UK Government’s guidance on this webpage.
  • Check to see if you are eligible for the Warm Homes Discount. Find out what that means here (please note that this is changing, this is what we know now).
  • Use our website Visit our Resident pages for a wide range of tips and further information about saving energy in your home.

Why are energy bills going up so much?

There is no short answer; it’s a complex issue. Wholesale gas prices have gone up by a record 350% since this time last year, including 37% between January and April this year. There seems to be four main factors; some recent limits to gas supplies from Russia as well as the conflict in Ukraine; an upturn in global gas demand as economies reopen after Covid-19 lockdowns; a cold winter last year which prompted higher gas demand and reduced the amount we have in storage; and lower wind speeds this autumn which mean more energy has been generated with gas rather than wind.

Why PEC's work is so important

Everything that we do, from upgrading existing and new-build homes to be less reliant on imported gas and more affordable to live in, to generating more local renewable energy, to supporting households to understand how to manage energy use and access available financial help, all contributes to making our community more resilient to crisis situations like this.

Looking more broadly, the way we produce and use energy is unsustainable. Moving away from fossil fuels, like gas, is one of the biggest challenges facing the UK but by no means impossible. Saving energy at home is an important step people can make across the country, but we also need urgent support from government to help everyone move to zero-carbon energy in a fair and supported way.

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