The End Fuel Poverty Coalition (EFPC) has written to Ofgem, the government regulator for electricity and gas markets in Great Britain, calling for the Safeguard Tariff to be preserved and extended.
Under the Safeguard Tariff, customers on prepayment meters or in receipt of the Warm Home Discount (WHD) are safeguarded as to how much they pay for their energy. This means there is a price cap at which suppliers can charge customers for their gas and electricity. More information about the Safeguard Tariff is available here.
Vulnerable customers are less likely to switch suppliers or tariffs. In 2016, the Competition and Markets Authority (CMA) reported that those on a low income, over the age of 65, on the Priority Services Register or with a disability are less likely to have switched supplier in the last 3 years. These consumers are therefore more likely to be on the highest tariffs and paying more than they should for their gas and electricity.
The Coalition advocates that the current Safeguard Tariff is expanded and is very concerned it will be prematurely withdrawn. Currently the Tariff is only available for those households in receipt of the WHD, which is made up of 2 groups; the ‘Core Group’, which largely consists of poorer pensioners, and the ‘Broader Group’ consisting of a small number of households who apply. This means many households who are of working age, in the lowest income deciles and burdened by high living costs miss out on the vital support provided.
Failure to extend and preserve the Safeguard Tariff could leave many low-income households exposed to increases in their energy bills, in turn creating anxiety over finances and leading to the adoption of unsafe coping mechanisms.
You can read the Coalition’s letter to Dermot Nolan, Chief Executive of Ofgem, here.