Energy price cap: OFGEM chief outlines rise in rate for customers
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Energy bills will rise from October as Ofgem recently announced it would be raising the price cap, with customers on default tariffs paying by direct debit seeing an increase of £139 from £1,138 to £1,277. Prepayment customers will see their bills rise by £153, from £1,156 to £,1309.
Many warnings were issued in response to this by charities and other organisations who detailed struggling families would not be able to cope.
The Money Advice Trust, the charity that runs National Debtline and Business Debtline, warned the announcement could not come at a worse time for many households struggling to pay their bills.
Jane Tully, the director of external affairs and partnerships at the Money Advice Trust, explained: “Increasing the energy price cap could not come at a worse time for the many households struggling to meet day-to-day costs.
“More than 20 percent of the people we help at National Debtline are already in energy arrears – any increase in cost is likely to push more into the red.
“With the rise in the price cap and increasing energy prices this will be a challenging winter for many people.
“Energy suppliers need to be proactive in looking for early signs that customers are struggling to pay and to offer the help they need.
“This issue is not for suppliers alone and the Government needs to work with Ofgem and the energy industry to ensure there is proper support for the increasing number of people unable to pay their bills.”
With winter costs set to become even more expensive, many families may end up becoming reliant on state support, such as Cold Weather Payments.
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Cold Weather Payments are awarded to certain benefit claimants where the average temperature in their area is recorded as, or forecast to be, zero degrees celsius or below over seven consecutive days.
Where this is triggered, claimants will get £25 for each seven day period of very cold weather between November 1 and March 31.
To be eligible for Cold Weather Payments, a person must be getting one of the following:
- Pension Credit
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Universal Credit
- Support for Mortgage Interest
Where recipients are eligible for Cold Weather Payments they will not need to make a claim, they will be paid automatically.
On top of Cold Weather Payments, there is also the Warm Home Discount Scheme, which opens up on October 18, 2021.
This scheme allows claimants to get £140 off their electricity bill for the winter of 2021.
To be eligible for this scheme, a claimant must either get the Guarantee Credit element of Pension Credit – known as the “core group”, or be on a low income and meet their energy supplier’s criteria for the scheme – known as the “broader group”.
Retirees may also be eligible for the Winter Fuel Payment scheme, which can benefit those who were born on or before September 26, 1955.
Eligible recipients of these scheme will get their Winter Fuel Payments automatically if they get the state pension or another social security benefit (excluding Housing Benefit, Council Tax Reduction, Child Benefit or Universal Credit).
Where recipients are eligible for Winter Fuel Payments, they’ll get between £100 and £300 to help with their energy bills.
Most payments will be made automatically in November or December and the latest they should come through is by January 14, 2022.
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