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Energy bills up in January as public blame Government for crisis

The public has placed the blame for people living in cold damp homes this winter at the door of the Government.  

In the Chancellor’s autumn statement on Wednesday, the Government refused to accept proposals from charities to provide an Emergency Energy Tariff for the most in need households and also ruled out a ‘help to repay’ scheme for the millions of people in energy debt. 

Polling conducted prior to the Autumn Statement for the Warm This Winter campaign found that well over a third of the public (37%) already attributed significant responsibility for the energy bills crisis to Government policy. 

Hardly any respondents (3%) said that Government policy bore no responsibility for people living in cold damp homes. [1]

Meanwhile, the Office of Budget Responsibility has concluded that the impact of the cost of living crisis and high energy bills means that living standards are forecast to be 3½ per cent lower in 2024-25 than pre-pandemic. Economists claim that this is the largest reduction in living standards since records began in the 1950s.

Fi Waters, spokesperson for the Warm This Winter campaign, commented:

“We’re devastated that the emergency energy tariff that would give hard-pressed families money off their monthly bills has not been adopted by the Chancellor in the Autumn Statement, but we’ve not given up. 

“The Government should be putting the vulnerable, disabled people, the elderly, those with medical conditions and the pregnant first rather than condemning them to living in cold damp homes.”

From 1 January 2024, Ofgem have confirmed that the average household’s energy bill will increase by 5% (or £94 a year) from current prices.

Compared to last year, the unit cost changes show decreases, but these are offset by daily standing charges that have increased by 5% for gas and 14% for electricity. Standing charges are now subject to a review by Ofgem.

When compared to pre-crisis levels, gas unit costs are more than double what they were and electricity costs are up 129%. Standing charges are up 8% for gas and 119% for electricity. [3]

A spokesperson from the End Fuel Poverty Coalition, commented:

“These price hikes come at the worst possible time for households. Bills will go up just as winter bites hard and household finances are hit further by Christmas credit cards, the long January pay period and the ongoing wider cost of living crisis.

“We warned* Ofgem that a January price cap rise was a bad idea when the regulator consulted on this in 2022. Now the chilling effect of the change is being realised, the inhumanity of this policy is clear to see.

“It will be anything but a happy new year for people trapped in Britain’s broken energy system.” 

Fi Waters from Warm This Winter continued:

“The price cap rising again in January is yet another kick in the teeth to ordinary people, particularly as in the last few weeks we’ve seen energy companies lining up to announce hundreds of millions of pounds worth of profits. They are raking it in and laughing all the way to the bank while ordinary people can’t afford to turn their heating on.

“It’s clear our energy system is broken. The relentless roll call of obscene profits and now a hike in energy bills in the new year, is not only hugely unfair, it’s costing lives, damaging health and wasting money as our reliance on fossil fuels is keeping bills sky high.”

Jonathan Bean from Fuel Poverty Action added:

“These inflated prices mean more cold damp homes and more deaths. Ofgem is protecting profits not people.”

ENDS

[1] Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 20th – 24th October 2023. Results were weighted to be nationally representative.

The public believe that energy firms have similar levels of responsibility as the Government –  showing similar levels of polling (38% felt firms had significant responsibility / 4% thought they had no responsibility). Just 15% said that external factors such as the war in Ukraine had a significant responsibility for the crisis (13% said these had no impact).

Q:UK24852_Q8. Summary – On a scale of 1 to 5 to what extent do you think the following groups are responsible  for the high numbers of people living in cold damp homes each winter? 1 indicates no responsibility at all and 5 indicates significant responsibility.  
  UK government policy Energy companies House builders Landlords External factors, such as the war in Ukraine
Base: All respondents (Unweighted) 2000 2000 2000 2000 2000
Base: All respondents (Weighted) 2000 2000 2000 2000 2000
1 – No responsibility 3% 4% 5% 4% 13%
70 72 108 76 262
2- 8% 7% 12% 8% 13%
150 135 231 163 270
3- 21% 21% 29% 22% 27%
427 421 582 445 535
4- 23% 22% 22% 23% 19%
452 447 443 469 388
5 – Significant responsibility 37% 38% 20% 33% 15%
732 760 404 661 305
Don’t know 8% 8% 12% 9% 12%
170 165 232 186 241


[*] Letter to Ofgem from End Fuel Poverty Coalition on January price rise proposal https://www.endfuelpoverty.org.uk/wp-content/uploads/220614-Ofgem-FINAL.pdf 

[3] Price Cap changes in unit costs and standing charges available at https://www.endfuelpoverty.org.uk/about-fuel-poverty/ofgem-price-cap/ 

 

Struggling households need £73 a month off energy bills to keep warm this winter

Data commissioned by the Warm This Winter campaign has revealed how much it would take to enable struggling households to be able to afford their energy bills. [1]

A fifth (21%) said that they need over £100 a month off their energy bills. On average, people struggling to pay energy costs said they need £73 a month off their bills to keep themselves warm this winter.

A fifth (21%) said that they need over £100 a month. On average, people struggling to pay energy costs said they need £73 a month off their bills to keep themselves warm this winter.

For those in work, the figure is £71 and for those who are not working, it rises to £77 a month.

Furthermore, Ofgem is expected to increase energy bills by 5% from 1 January and predictions from experts show that prices will remain high until March 2025.

Over a third (38%) of people from households where someone is under 5, pregnant, over 65 or with preexisting health conditions think they won’t or may not be able to afford to put the heating on at all this winter. Almost two thirds (62%) already want to put the heating on, but are worried about the cost. 

A wide range of health, poverty, housing and environmental organisations and academics have called on the Chancellor, Jeremy Hunt MP, to help families most in need of support through the introduction of an Emergency Energy Tariff and a help to repay scheme for those in energy debt.

The Emergency Energy Tariff would use the existing Energy Price Guarantee mechanism to fix the unit costs and standing charges for vulnerable groups at a lower level. Campaigners have suggested that this is fixed at the levels of energy bills in winter 2020/21, which would see eligible households’ monthly energy bills reduced by approximately £87 a month from current levels – a saving of around 46%. [2]

Polling suggests 83% of the general public – who have an opinion would support such a measure [3].

A spokesperson for the End Fuel Poverty Coalition, commented:

“If the UK Government thinks that people will be able to get through this winter without more support for their energy bills, then they are living in cloud cuckoo land. 

“We need to see the Chancellor introduce an Emergency Energy Tariff for vulnerable households and a Help To Repay scheme for those in energy debt.

“Even in winter 2024/25, energy bills will be 79% higher than winter 2020/21. Record prices are here to stay and the UK Government needs to take action to help people stay warm this winter and every winter through increased support for insulation and renewables.

“Failure to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes.”

Fi Waters, spokesperson for the Warm This Winter campaign, said:

“The Government is now running dangerously out of time to help people who are most at risk of the health complications of living in cold damp homes.

“People want to see bills come down permanently, which is going to require further government action.

“We need to see beefed up programmes to insulate homes, more heat pumps fitted, which are cheaper to run, and more homegrown renewable energy built so we can get off expensive gas.”

The initial research to inform the development of the proposal and targeting of support was undertaken by the University of Oxford’s Environmental Change Institute and Cambridge Architectural Research.

ENDS

[1] Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 20th – 24th October 2023. Results were weighted to be nationally representative.

Previous research found that 18% of the population spent last winter in cold damp homes, with a quarter of people with health conditions unable to heat their homes to a safe standard (26%, 4.75m).

UK population NET: Working NET: Not working
Base: All answering who would need to cut down essential spending, or couldn’t afford their bill even with essential cuts, or said they were unsure if their bill would be affordable (Weighted) 1339 845 493
[113] £101 or more 21% 17% 28%
281 141 140
[88] £76-£100 17% 18% 13%
222 156 66
[63] £51-£75 20% 24% 14%
269 199 70
[38] £26-£50 14% 15% 13%
191 127 64
[13] £1-£25 2% 3% 2%
32 23 9
[0] I do not need bills to come down in order to stay warm this winter 3% 3% 4%
45 23 22
Don’t know 22% 21% 25%
300 176 124
Average 73.0 70.7 77.2

[2] The full copy of the letter is available online: https://www.endfuelpoverty.org.uk/wp-content/uploads/231101-Chancellor-AS-Letter.pdf 

[3] Polling figures on support for the Emergency Tariff exclude those who responded “don’t know”. Including Don’t Knows still sees consistent support in the high 60s, low 70s percentage. 

Energy firms’ profits surge as households left in the cold

Weeks of autumn profit announcements by energy firms have come at the same time as data from the Warm This Winter campaign found that over a third (38%) of people from vulnerable households think they won’t or may not be able to afford to put the heating on at all this winter.

Among the recent announcements were National Grid, which posted profits of hundreds of millions of pounds in their distribution and transmission businesses. SSE also declared  £335m profits in similar parts of its company.

A large part of these profits come from the firms’ role as Distribution Network Operators (DNO) for electricity, which customers pay for through Standing Charges. In practice, it means that these firms can vary the cost of bills for people across different regions it provides electricity to.

For example, in the East Midlands, National Grid customers have the cheapest energy in the UK, but households it serves in south west England are paying £75 more every year in standing charges.

Ofgem has now announced an investigation into Standing Charges and a spokesperson for the End Fuel Poverty Coalition commented:

“The announcement of a Standing Charges review is a welcome step forward. Recent Warm This Winter Tariff Watch reports have highlighted how we need much more transparency in how our energy bills are calculated and the factors that go into calculating what is seen as a fair tariff.”

Another firm which benefits from Standing Charges is Scottish Power which is both an energy distributor and a supplier to households. Its Madrid-based parent company Iberdrola posted profits of 3.4bn Euros for the first nine months of 2023.

The supplier, which was previously named and shamed by Ministers as the worst culprit for forcibly installing prepayment meters, was recently granted 124 warrants for forcible PPMs in a move that has sparked concern among campaigners and politicians.

Jonathan Bean from Fuel Poverty Action, said:

“Firms are celebrating bumper profits whilst energy firms continue their plotting to restart the abhorrent process of breaking into homes to install prepayment meters. 

“It’s yet another example of firms profiting from misery.”

As research for Warm This Winter found that among those badly affected by the energy bills crisis are pregnant mothers and young families, all aspects of the energy industry have enjoyed a profits bonanza.

BP announced £2.7bn profit and Shell reported over £5bn profits.

Shell was recently offered 10 of the new 27 oil and gas licences in the North Sea by the Government. However, an audit of production data by analysts at Uplift found that across the hundreds of licences offered by UK governments since 2010, just 16 days of new gas has been delivered to the grid – half of which was sent to the Netherlands.

Equally, Norwegian firm Equinor’s profits continued to soar – up to £6.6bn according to the latest results. The company will also enjoy a tax break from the UK Government for its controversial Rosebank field.

Reporters at Bloomberg concluded that this field won’t begin pumping oil and gas until at least 2026, and it isn’t large enough to have an impact on the security of UK energy supply or prices

Fi Waters, spokesperson for the Warm This Winter said:

“These profits are shocking as 38% of vulnerable households say they cannot afford to put the heating on at all this winter. That’s pregnant women, the elderly, families with young kids and people with long term illness.

“The Government must step in and provide a consistent Help to Repay scheme for households in energy debt and an Emergency Energy Tariff guarantee which is available to all vulnerable households, regardless of supplier.”

The Emergency Energy Tariff would use the existing Energy Price Guarantee mechanism to fix the unit costs and standing charges for vulnerable groups at a lower level. Campaigners have suggested that this is fixed at the levels of energy bills in winter 2020/21, which would see eligible households’ monthly energy bills reduced by approximately £87 a month from current levels – a saving of around 46%.

Proposals for such a move are backed by 83% of the public and the initial research to inform the development of the Emergency Energy Tariff and targeting of support was undertaken by the University of Oxford’s Environmental Change Institute and Cambridge Architectural Research.

Dr Tina Fawcett, Associate Professor, University of Oxford:

“Our research has helped identify how to effectively target vital support to households most at risk this winter. To avoid future energy bill crises, locally we need more investment in energy efficiency and energy advice, and nationally we must rapidly reduce our dependence on fossil fuels.”

The public can sign the petition supporting an Emergency Energy Tariff online: https://www.warmthiswinter.org.uk/get-involved/emergency-energy-tariff-petition

Ministers told to show leadership on prepayment meters scandal

Ministers must show further leadership and ban the forced transfer of homes onto prepayment meters, according to campaigners.

In a letter sent to the Secretary of State for Energy Security & Net Zero, Claire Coutinho MP, and copied to the Minister for Consumer Energy and the Lord Chancellor, the End Fuel Poverty Coalition has claimed that to date, people across government and industry have tried to “wash their hands of responsibility.”

The latest revelations in the Times on forced prepayment meters (PPMs) showed agents for Scottish Power securing warrants to break into the homes of mothers with young children to force them onto PPMs.

Concerns were raised about Scottish Power by the House of Commons Energy Security Committee after a letter on the issue to MPs from the Coalition. Scottish Power is among the firms being considered by Ofgem as potentially being in a fit state to restart the forced transfer of homes onto PPMs in the coming weeks.

However, according to the letter now sent to the Minister, the Times investigation raises concerns that: “the checks and systems Scottish Power have in place are not fit for purpose. 

“Given the firm has been making progress towards being granted permission from Ofgem to restart forced PPM installations, we believe this calls into question the whole system the regulator has in place.”

In the letter, the Coalition asks the Secretary of State to:

  • Ban the practice of forced prepayment meters outright through legislation in the House of Commons. Ministers rejected the opportunity to do this during the passage of the Energy Act, leaving enforcement up to voluntary codes of practice and licence conditions.
  • Instruct Ofgem that the current ban – which includes switching of smart meters into PPM mode – must stay in place until at least April 2024. 
  • Ensure that Ofgem places Scottish Power under heightened monitoring for all aspects of its customer service and for its dealings with vulnerable customers. Scottish Power and its subcontractors must also be instructed to cancel all warrants it has sought so far and cease any current warrant applications being made.

The letter also highlights the “cloak of secrecy” which magistrates courts operate under and raises concerns that the same poor practices identified in the original PPMs scandal are still present, including distant hearings and nodding through batch applications.  

The End Fuel Poverty Coalition stresses that it recognises energy firms have genuine concerns about the levels of household energy debt caused by record energy bills, but argues for an alternative to forced PPMs – the introduction of a Help to Repay scheme and an Emergency Energy Tariff for vulnerable groups.

Over the summer, the End Fuel Poverty Coalition repeatedly highlighted to regulators and Ministers that the PPMs scandal was in danger of returning, first issuing a warning about energy firms’ conduct on PPMs on 17th May.

On 13th July, in a formal consultation response [pdf], the Coalition warned the regulator about firms’ conduct and in an accompanying press release urged the Government to act, also writing to the Minister highlighting the consultation response [pdf].

On 8 Sept the Coalition wrote to the current Secretary of State asking for a ban on forced PPMs again and on other issues including energy debt. The minister is still to reply to this letter.

Jonathan Bean from Fuel Poverty Action said: 

“This is yet more evidence that energy firms and Ofgem cannot be trusted to protect struggling customers from harm.  

“Forced installations of prepayment meters or switches of smart meters to PPM mode are inherently risky as they can lead to the loss of heating in the depths of winter.”

Jan Shortt, General Secretary of the National Pensioners Convention commented:

“The Secretary of State must ensure that the regulator, Ofgem, is much more proactive in applying the Code of Practice. 

“The NPC has been assured in writing that no energy provider currently meets the standards and therefore no Court should be undertaking the signing of warrants. 

“The impact on customers put through this process should not be dismissed by the energy industry and government so lightly.”

Warm This Winter campaign spokesperson Fiona Waters added: 

“It’s appalling that Scottish Power were granted warrants which would allow them to force their way into over a hundred homes to install prepayment meters and leave vulnerable people with just £30 credit.

“We now know at least two of those targeted had babies and toddlers which is completely against the Ofgem guidelines. It shows vetting is not working and the only way to safeguard against children being put in danger is to ban this barbaric act and find a better way to help ordinary people who find themselves in energy debt through no fault of their own.”

The full letter can be read online [pdf].

Call for Emergency Energy Tariff as vulnerable households fear the winter

Over half of people from vulnerable households (56%) are worried about being cold this winter, according to new data from Opinium, commissioned by the Warm This Winter campaign. [1]

The figure rises to 63% among people living in a household where someone is suffering from a pre-existing health condition or is disabled.

Meanwhile, over a third (38%) of people from households where someone is under 5, pregnant, over 65 or with preexisting health conditions think they won’t or may not be able to afford to put the heating on at all this winter. Almost two thirds (62%) already want to put the heating on, but are worried about the cost. 

Three quarters (76%) of people living in households with young children will be putting in place measures to keep warm this winter, with almost a quarter (23%) saying the family will be going to bed early to keep warm. 

For people from households where there is an expectant mother, almost nine in ten (88%) are taking cost saving measures, with over a third (35%) of pregnant mothers or their partners saying that they will spend more time in public heated places (for example a library, community centre or warm space).

The energy bills crisis is now predicted to be so severe that a wide range of health, poverty, housing and environmental organisations and academics have written to Chancellor, Jeremy Hunt MP, to request the introduction of an Emergency Energy Tariff.

The Emergency Energy Tariff would use the existing Energy Price Guarantee mechanism to fix the unit costs and standing charges for vulnerable groups at a lower level. Campaigners have suggested that this is fixed at the levels of energy bills in winter 2020/21, which would see eligible households’ monthly energy bills reduced by approximately £87 from current levels – a saving of around 46%. [2]

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The coordinator of the End Fuel Poverty Coalition, which is part of the campaign to introduce the Tariff, commented:

“The reality of this winter is that, without support, we will be a nation sheltering in warm spaces, cowering in one room of our homes or wrapped up inside like the michelin man. This should not be acceptable in a modern society. 

“Failure by the Government to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes.

“The proposed Emergency Energy Tariff is a specific, targeted, time limited and practically possible intervention which the Chancellor can make to send direct help to households who are most at risk of living in cold damp homes. 

“The Government should meet with charities and industry to finalise the details of the proposal. It can then use the opportunity of the Autumn Statement to send a clear message to the public that Ministers understand their suffering and are prepared to help them stay warm this winter.”

Polling suggests that 83% of the public who have an opinion would support such a measure – with support consistently high among all demographic groups and all parts of the UK [3].

The research also suggests that, among those who will have to cut back on essentials to afford their energy bills or can’t afford them, the plans for an Emergency Energy Tariff would provide them with enough financial support to enable them to avoid the worst of the winter crisis. [4] 

Fi Waters, spokesperson for the Warm This Winter campaign which commissioned the research, commented:

“As millions of households batten down the hatches and prepare for a miserable winter in cold damp homes, only the Government can now prevent a winter crisis.

“As well as this emergency tariff for those now priced out of the market, people want to see bills come down permanently, which is going to require government action. We need to see beefed up programmes to insulate homes, more heat pumps fitted, which are cheaper to run, and more homegrown renewable energy built so we can get off expensive gas.”

Jan Shortt, General Secretary of the National Pensioners Convention:

“Government financial support for this winter is absolutely crucial to older and vulnerable people. A longer term effective policy of addressing fuel poverty must contain genuine and active moves to sustainable, renewable and affordable energy.”

The Chancellor has also recently been urged to use the Autumn Statement to tackle record levels of existing energy debt through a Help To Repay scheme, which would be in addition to support for tariffs to prevent debt levels escalating further.

Researchers examined the make-up of groups who think they will or could be  unable to afford to turn the heating on this winter and found little difference between groups who work or do not work and found that 27% of people who are not on benefits can’t or may not be able to afford to heat their home. However, with 50% of benefit recipients saying they will not or may not be able to afford to turn their heating on, campaigners have also called for the Government to upweight pensions and benefits in line with inflation and remove punitive measures such as the two-child benefits cap.

The initial research to inform the development of the proposal and targeting of support was undertaken by the University of Oxford’s Environmental Change Institute and Cambridge Architectural Research.

Dr Jason Palmer, Cambridge Architectural Research:

“Financial support for households struggling with fuel poverty is critical this winter, and only with government help will the most vulnerable people stay out of hospital and avoid anxiety from going into debt. This support should run in parallel with much greater investment in energy efficiency to address fuel poverty and bring down carbon emissions from homes.”

Dr Tina Fawcett, Associate Professor, University of Oxford:

“Our research has helped identify how to effectively target vital support to households most at risk this winter. To avoid future energy bill crises, locally we need more investment in energy efficiency and energy advice, and nationally we must rapidly reduce our dependence on fossil fuels.”

Rachael Williamson, Head of Policy and External Affairs, Chartered Institute of Housing:

“Our members see first hand the impact that high energy prices are having on some of the most vulnerable. Even before the recent rapid increase in gas and electricity prices, approximately 4.5 million UK households were living in fuel poverty. An emergency energy tariff would help provide targeted support for those most at risk this winter. This should be coupled with a longer-term strategy to develop a social tariff, boost energy efficiency and tackle energy debt so we can reduce fuel poverty and carbon emissions.”

Alex Massey, Head of Policy, Public Affairs and Campaigns, MND Association

“People living with MND have been hardest hit by the energy crisis. Many rely on a wide range of personal powered equipment at home to maintain life, health and wellbeing. Consequently, soaring energy costs have placed many households in an impossible financial position. Targeted government investment is now essential to prevent people living with MND being forced to choose between which vital piece of medical equipment to switch off this winter.”

ENDS

Notes to Editors

[1] Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 20th – 24th October 2023. Results were weighted to be nationally representative. 

Previous research found that 18% of the population spent last winter in cold damp homes, with a quarter of people with health conditions unable to heat their homes to a safe standard (26%, 4.75m).

[2] Read the pdf of the letter online: https://www.endfuelpoverty.org.uk/wp-content/uploads/231101-Chancellor-AS-Letter.pdf

[3] Polling figures on support for the Emergency Tariff exclude those who responded “don’t know”. Including Don’t Knows still sees consistent support in the high 60s, low 70s percentage. 

[4] On average, researchers found that these groups felt they needed £73 off their monthly bill this winter to make it affordable to heat their homes to a comfortable level. The proposed Emergency Energy Tariff would provide approximately £87 off the bills.

People unable to clear energy debts as calls for Help to Repay scheme increase

One in four people with energy debts (24%) are currently unable to repay, according to new research commissioned by National Debtline.

The debt advice service is leading a coalition of 13 organisations calling on the Chancellor to introduce a ‘Help To Repay’ scheme in the Autumn Statement.

The findings, based on UK-wide research commissioned from Opinium, show that an estimated 6.4 million UK adults (12%) are behind on their energy bills heading into this winter – an increase of more than 824,000 since April.

More than one in five people (22%) say they have cut back on food and other essentials in order to keep up with energy bills (an estimated 11.6 million people). Two thirds (66%) say they will reduce how much they use the heating this winter.

Meanwhile millions of people have sold personal possessions (9%, 4.7 million), used their overdraft (7%, 4 million) and turned to high-cost credit (4%) in an effort to stay on top of rising energy costs.

The research also reveals the difficulties facing people falling behind in resolving their situation. Of those currently behind with their energy bill, 21% said their supplier had not accepted an affordable offer of repayment – and 18% had been unable to get through to their supplier when they tried to contact them to discuss the debt.

One in four (24%) say they are regularly losing sleep worrying about their energy debt.

The findings come as energy debt hit its highest-ever level of £2.6 billion, according to the energy regulator Ofgem.

A coalition of 13 organisations led by National Debtline and including National Energy Action, Scope and the End Fuel Poverty Coalition, have written to the Chancellor, Jeremy Hunt, urging him to introduce a ‘Help to Repay’ scheme to provide repayment matching and debt relief for unaffordable arrears.

Separate National Debtline research shows that almost three quarters of UK adults (73%) think people who have fallen into energy debt due to high prices should be given help to reduce what they owe.

David Cheadle, acting chief executive of the Money Advice Trust, the charity
that runs National Debtline, said:
“High energy costs have left millions trapped in energy debt – and these
households urgently need support this winter. The Government now has only a limited window of opportunity to act, which is why we are calling on the Chancellor to use the Autumn Statement to step in with the help people need.

“Our Help to Repay proposal would help bring down the record £2.6 billion energy debt in the market – and offer a lifeline to people whose incomes simply will not stretch to pay off their energy arrears. It would also have the support of the general public – with 73% backing this kind of government help.

“National Debtline advisers hear every day of the toll that energy debts are taking on people’s lives and health, and the urgency of the situation cannot be underestimated. Crucially, no one needs to go through this alone. I would urge anyone struggling to cope with their energy bills to seek free, independent debt advice as soon as possible.”

Matt Copeland, head of policy and public affairs at National Energy Action, said:
“Debt levels in the energy market are at an all-time high after years of unaffordable prices. And monthly energy bills for many will be higher this winter than the last. The impact that this has on low-income households is
profound. One-third of British adults say they will struggle to pay their energy bills this winter.

“Ofgem’s proposal to raise the price cap as a way of dealing with the increased debt only exacerbates the problem. Failure to provide support to reduce energy bills and energy debt would be catastrophic, leaving millions of households unable to stay warm and healthy this winter.

“A ‘Help to Repay’ scheme would accelerate debt payments, ease the burden on household budgets, and help create a more sustainable energy market.”

James Taylor, executive director of strategy at disability equality charity Scope, said:
“Winter hasn’t hit yet and already Scope’s energy helpline is being inundated with calls from disabled people facing eye-watering amounts of debt. On average, our customers have almost £1,800 worth of energy debt – more than double this time last year. That’s despite cutting back everything they can.

“Life costs a lot more for disabled people, who need more energy to power wheelchairs and breathing equipment, or have the heating on more for their health. The government must defuse this debt timebomb, bring in emergency support for this winter, and keep its promise to consider an energy social tariff which would end sky-high bills for disabled people.”

This month Ofgem announced plans to increase energy bills by £17 per household to reduce the risk of energy firms going bust or leaving the market – a decision that Fiona Waters a spokesperson for the Warm This Winter campaign called  “appalling.” Waters added:

“The government needs to put the public’s need for an affordable energy supply ahead of the demands of energy giants.”

Commons Committee asked to take urgent evidence on forced PPMs

The House of Commons Energy Security Committee has been asked by campaigners to hold an urgent evidence session on the prepayment meters scandal.

Last week Scottish Power was granted 124 warrants by Berkshire Magistrates Court to forcibly enter people’s homes to force them onto prepayment meters (PPMs). 

According to media reports, the magistrate granted all 124 warrants after examining just 20 of them in detail.

One of these warrants was granted against a property in Grimsby, almost 200 miles away.

The End Fuel Poverty Coalition has now written to the Committee outlining more than ten serious concerns about this decision and requesting its help in understanding the circumstances around the warrants. 

The group has asked the Committee to take evidence within the next 28 days from Scottish Power, Richburns Ltd (debt collection agency), His Majesty’s Courts and Tribunals Service and Ofgem.

The forced PPMs scandal rocked the energy industry after investigations by the i paper and The Times revealed the extent energy firms were using the courts to gain warrants to people’s homes to force vulnerable people onto PPMs. 

Expert reports highlight the health dangers potentially caused by people’s PPMs switching off and leaving them in cold damp homes.

These warrants were granted despite a ban on the forced transfer of homes onto prepayment meters still being in place. 

Campaigners have previously written to Ministers to call for a Help To Repay scheme to be introduced to remove the need for forced prepayment meter transfers.

A spokesperson for the End Fuel Poverty Coalition, commented:

“It is totally inappropriate for energy firms to be seeking to force their way into people’s homes to push them onto dangerous prepayment meters in this way. This strategy leaves potentially vulnerable customers at risk of disconnection and going without energy.

“Instead, we need Government and industry to agree to a Help To Repay scheme which will help bring down the astronomical levels of energy debt and help households struggling with the cost of living crisis to get back on an even keel.”

National Pensioners Convention General Secretary Jan Shortt said: 

“It is interesting that Scottish Power had warrants passed before 8 November, when Ofgem’s mandatory regulations covering energy providers are due to come into force.

“We oppose magistrates signing warrants for forced entry in bulk. Magistrates have the overriding power when it comes to human rights, and we expect that they will take genuine steps to ensure that every application for a warrant to force entry to fit a prepayment meter will be vigorously scrutinised to ensure adherence to the Ofgem Code of Practice.  

“We recognise this will cause delays, but the alternative is to breach individual human rights and cause distress to those struggling with paying bills.

“We would prefer to see an end to the use of prepayment meters with an agreed strategy to transfer those customers who do not want them back to a payment scheme that enables them to be debt free.”

Frazer Scott, CEO, Energy Action Scotland commented:

“People are struggling with unaffordable energy costs and spiralling debt. This has reached record levels. Some of the most vulnerable in society have not seen the right levels of support to ensure that their health and wellbeing is protected. 

“The forced movement of people from credit to prepayment places an unacceptable level of risk to the lives of people. Government, regulator, suppliers and our courts are failing to provide meaningful protection. 

“We are dismayed that action has been taken by suppliers and the courts ahead of the introduction of changes to regulations which should ensure that no vulnerable person has to endure being subject to a forced installation.” 

Warm This Winter spokesperson, Fiona Waters said: 

“It’s appalling that Scottish Power have been granted warrants to force their way into over a hundred homes, install prepayment meters and leave vulnerable people with just £30 credit. Prepayment meter users often have to clear debt before they can top them up. We hope Ofgem and the Energy Security Committee will exert all their authority to stop this and not condemn these customers to living without any heating or lighting.”

Jonathan Bean of Fuel Poverty Action added: 

“Scottish Powers’ plan to break into homes, and risk leaving people unable to stay warm this winter, has been exposed. The courts are failing to properly assess most cases, and Ofgem is guilty of wishful thinking. Government must act now to end this inhumane and dangerous practice.”

The full letter is available to read as a pdf.

Advice workers and charities could benefit after new Ofgem rules

Energy suppliers must prioritise enquiries from vulnerable customers and their representatives, under new rules announced by Ofgem. 

A recent report [paragraph 36] by the House of Commons Select Committee on Energy Security, called for firms to set up a priority access line for charities working with households in fuel poverty. This would enable advice workers to access enhanced customer service and enable them to help more people in the long run.

Roni Marsh from South West London Law Centres gave evidence [Q42] to the Committee in September and told MPs:

“I would like to ask for us to have priority access to some of the energy firms, not so that we can spend less time with people but so that we can see more people with the time we have with a priority support route.”

Now under the new Ofgem rules [p8], energy firms have an obligation to “prioritise vulnerable customers who need immediate support, or their representatives acting on their behalf.”

Energy firms now have until the 14th December to put these measures in place.

A spokesperson for the End Fuel Poverty Coalition, whose members include front line community organisations, commented:

“Thousands of hours of advice time is wasted each year by charities waiting on hold to speak to energy firms about the problems faced by the people they support. We expect energy firms to make good on the promises they made to MPs on the Commons Energy Select Committee before this winter.”

The requirements also require suppliers to contact customers if they miss two monthly or one quarterly payment, check to see if they are struggling with bills and, if so, offer support such as affordable payment plans or, if appropriate, repayment holidays. 

Recent research by a price comparison website found that almost one in seven people say they have gone from being in credit to their energy firm a year ago to owing money now.

And as a first step, suppliers will also need to publish the ratings of their customer service. Ofgem will also begin work with the sector to develop new measures of customer service with a view to publishing next year.

Warm This Winter campaign spokesperson, Fi Waters said: 

“Suppliers need to get their act together and give customers the service they deserve. Our Tariff Watch Report revealed companies are charging £242 on average per customer on operating costs.

“Instead of spending the same amount on customer service as they do on marketing, which includes football sponsorship, they should plough that back into providing a proper and effective service for the ordinary people they are making millions from. 

“Whilst we welcome any move from Ofgem to make suppliers more accountable, what Warm This Winter is demanding is an end to our broken energy system and current government inaction that is costing lives, damaging health and wasting money.” 

Jonathan Bean of Fuel Poverty Action said:

“Ofgem’s proposals are a weak response to the awful treatment that many customers suffer.  Vulnerable people are forced to battle for months, causing enormous harm. 

“Rather than punishing them for their failures, Ofgem may even allow energy firms to increase their already bloated operating cost allowances.”

The End Fuel Poverty Coalition spokesperson added:

“It’s not enough for energy firms to just pick up the phone to customers struggling with their bills. With soaring energy debt levels, people need to have their concerns dealt with efficiently and in a sympathetic manner.

“We hope that as the new guidance is implemented, Ofgem will expand the measures it uses to assess energy firms’ performance. As well as ‘contact ease’ being measured and published, the regulator should also consider ‘contact success’ and ‘contact empathy’ as measures of performance for energy firms.”

The new standards – developed following a statutory consultation this summer – aim to make it easier for customers to contact their suppliers, ensure households who are struggling with bills are supported and improve overall customer satisfaction. The End Fuel Poverty Coalition’s response to the consultation can be read online [pdf].

The introduction of the new rules into supplier license conditions means Ofgem claims it will be easier for the regulator to take action where there is evidence of suppliers failing to meet these requirements. 

Consumers need help to repay energy debt, not higher bills

Proposals to increase energy bills further in response to surging levels of household energy debt have been criticised by campaigners.

While energy suppliers made more than £2bn in profits in the first half of 2023 alone, new figures from Ofgem found energy debt reached a record £2.6 billion due to soaring wholesale prices and cost-of-living pressures on households.

A one-off increase to customers’ energy bills of up to £17 a year is now being considered by Ofgem, which the regulator argues will protect firms from customers running up large debts.

But charities and campaigners have called for the introduction of a “Help To Repay” scheme instead of passing the cost of debt onto all households.

The coordinator of the End Fuel Poverty Coalition, commented:

“Households are struggling under the huge weight of energy debt – which has been caused through no fault of their own, but by record energy bills.

“All this time, energy firms have continued to profit from the misery of people racking up debt and living in cold damp homes.

“Rather than pass on more increases to energy bills, the Government needs to work with energy firms to introduce a ‘help to repay’ scheme to help get Britain’s households back onto an even keel.

“Given that the Government is due to hand Norwegian oil giant Equinor a massive tax break for the controversial Rosebank fossil fuel field, there’s an obvious source of money for this support plan.”

Adam Scorer, chief executive of National Energy Action, said: 

“This is the highest level of energy debt we have seen, it is growing quickly and concentrated in the poorest households.”

In June, a range of organisations including the End Fuel Poverty Coalition, Money Advice Trust, StepChange Debt Charity, Scope and National Energy Action wrote to the Secretary of State for Energy Security and Net Zero [pdf] with proposals to set up a ‘Help To Repay’ repayment-matching scheme.

David Cheadle, acting chief executive of the Money Advice Trust, the charity that runs National Debtline, told Press Association: 

“With energy debt at a record high, now is the worst possible time to increase bills further, as Ofgem is proposing.

“Instead, the Government must step in and act now to help households facing unaffordable debt repayments by introducing a Help to Repay scheme to offer payment matching and write-off.

“Doing so would help tackle the record levels of energy debt we are now seeing, without the need to increase energy bills for all customers.”

Fiona Waters, spokesperson for the Warm This Winter campaign, said: 

“The fact Ofgem is considering a £17 additional bill on all households is appalling. They say it’s to cover £2.6 billion of energy debt, but that enormous debt just proves ordinary people cannot keep footing the bill for our broken energy system. 

“The government needs to put the public’s need for an affordable energy supply ahead of the demands of energy giants. 

“Why not use the billions that its giving in tax breaks to Norwegian oil giant Equinor for the Rosebank oil field, which will do nothing to lower fuel costs, to write off this debt that people have through no fault of their own. ”

Fixed price tariffs could trap customers on higher bills

The second Warm This Winter Tariff Watch report has revealed that the energy market has 337 fixed price tariffs that are more expensive than the current Ofgem price cap. 206 tariffs will still be more expensive than the predicted January price cap.

Consumers on these tariffs will be paying a penalty for having fixed their energy bills and with an average exit fee of £138, many households could feel trapped into remaining on tariffs which now represent a bad deal.

The report also reveals an unwelcome league table of the exit fees some energy firms charge for leaving a tariff early. [1]

Just one in twenty (6%) British Gas tariffs come with no exit fees – and the firm’s average exit fee is £62. Among the other main suppliers, 12% of EONs tariffs have no exit fees, 14% of EDF and 15% of Ovo’s tariffs are free of exit fees.  Ecotricity, Utility Warehouse, So Energy also had small proportions of their tariffs with zero exit fees.

On the other hand, almost all tariffs for Good Energy, Octopus and Cooperative Energy come with no exit fees. However, one smaller supplier, Ecotricity, charges the highest exit fees, averaging £150.

As unit costs have come down in recent months, but are expected to increase again in January 2024, the report reveals that customers could save money over the next 12 months if offered a “one year fixed” tariff with unit rates and standing charges below the current price cap. [2]

These rates for a direct debit customer are as the below:

  • Standing Charges: Electric 53 p/day, Gas 30 p/day
  • Unit Rates: Electric 27 p/kWh, Gas 7 p/kWh

However, the analysis shows there just ONE dual fuel fixed tariff currently on the market is below these levels. For the best variable deal, the report authors predict that the current best offer could be with two different suppliers.

The report also reveals that energy firms’ operating costs are making up £242 (an average of 13%) of customers’ bills.

In an analysis of firms’ operating costs, the report reveals that energy firms may be spending almost as much on marketing, which includes sponsoring football teams, event venues and creating TV adverts (c.11% of operating costs), as they do on operating customer contact centres (c.12% of operating costs).

Operating costs, which go into the standing charges paid by households, also consist of central overheads, such as office rents and the cost of maintaining energy meters.

The report also reveals that suppliers are now expected to make an additional £140m in profit on the nation’s energy bills over the next 12 months, thanks to changes to the Ofgem price cap which came into force on 1 October.

The new rules mean that firms now make an average £64.70 profit per customer per year, up by £4.70 per customer. The projected 12 month profits for all energy suppliers has hit £1.88bn, an increase of £140m from the previous Warm This Winter Tariff Watch report (an 8% increase).

The predictions are in addition to any profits which firms have already made in 2023, which stand at a conservative estimate of over £2bn. [3]

A spokesperson for the End Fuel Poverty Coalition, commented:

“With energy prices subject to change, customers should exercise extreme caution when thinking about switching and fixing and we would call on companies to waive exit fees so people can switch easily to the cheapest tariff available.

“And while households suffer, the Government sits on its hands and refuses to introduce longer term tariff reforms which could bring down bills and help people stay warm this winter and every winter.

“Indeed, with the Prime Minister recently halting work to improve the energy efficiency of buildings, Britain’s households will be trapped in cold damp homes for years to come.”

Fi Waters, spokesperson for the Warm This Winter campaign which commissioned the report, said:

“Energy firms spending £242 per customer on operating costs adds insult to injury for UK households struggling to stay warm this winter. Customers should not be subsidising fancy headquarters, entertaining and marketing when these companies are making billions. That money should be used to end energy debt and lower bills. It’s yet another example of our broken energy system which the government and energy firms seem to be in denial about.”

ENDS

This press release refers to England, Scotland and Wales only. For full details, methodology and sources, read the full report available at: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch_2_Final_Oct_2023.pdf

[1] Minimum, maximum and average single fuel exit fees per supplier for fixed tariffs in the last two years.​​

Energy firm Minimum exit fee Maximum exit fee Average exit fee Count of zero exit fee tariffs % with zero exit fees
Ecotricity £100 £200 £150 0 0%
Utility Warehouse £25 £75 £46 0 0%
So Energy £5 £75 £27 0 0%
Shell Energy £30 £75 £44 1 1%
British Gas £30 £100 £62 7 6%
E.ON £25 £30 £29 3 12%
EDF Energy £15 £200 £66 29 14%
OVO Energy £30 £75 £37 30 15%
SSE £30 £75 £40 19 33%
ScottishPower £30 £150 £66 66 40%
Outfox the Market £30 £300 £62 24 47%
Sainsbury’s Energy £30 £30 £30 9 69%
Affect Energy £75 £75 £75 25 93%
Ebico Living £75 £75 £75 33 94%
Co-operative Energy £75 £75 £75 85 98%
Octopus Energy £75 £75 £75 249 99%
Good Energy £0 £0 £0 4 100%

[2] Best tariff prices correct as of 2 October 2023. The energy market is constantly changing and customers should always check for the best deal based on their actual usage. The information on suppliers is solely a reflection on tariff prices and takes no other factors into account (e.g. customer service levels, support for vulnerable households etc). Households should always think before they fix. 

Advice provided in this press release should not be seen as formal financial advice. Energy prices are volatile and subject to significant changes at short notice. Ofgem updates its price cap calculations every quarter. Future Energy Associates advise that households who suspect they may be on overly expensive energy tariffs should explore alternative options on price comparison websites, consult with their energy suppliers, or seek guidance from consumer advocacy groups, such as Citizen’s Advice to determine the most suitable steps for them.

[3] Declared profits from 2023:

Among the firms which also provided energy, but whose supply side profits are harder to quantify EDF, profits lept to £2bn (€2.3 billion) in the first half of 2023. Ofgem is consulting on plans to make profits reporting more transparent.