Energy Bills Archives - Page 3 of 11 - End Fuel Poverty Coalition

Changes could halve energy standing charges

A new discussion paper that would see energy standing charges reduced has been published by campaigners.

Future Energy Associates have identified how standing charges for every household with electricity and gas connections could plummet from £334.08 a year to £183.02 – a reduction of almost half (£152.06 / 46%).

For electricity the standing charge would reduce from £219.42 to £149.17 per year (32% reduction) and for gas the standing charge would reduce from £114.66 to £33.85 per year (71% drop).

Delivering these changes would require changes to Ofgem regulations and Government funding as well as action taken to protect low income and high usage households, such as those who rely on energy for medical needs.

This could include the introduction of a social tariff, which is backed by well over half the population according to recent polling by Opinium, and could be paid for through contributions from energy industry profits (producers, networks and suppliers).

The analysts identified that up to £5bn a year of costs on energy bills could be moved to general taxation. Policy makers could remove these costs from all bills, which would bring down electricity unit rates as well or (for a lower cost to the Treasury of around £200m a year) remove the costs just from vulnerable low income households with high energy needs.

The options paper commissioned by the Warm This Winter campaign includes moves to:

Transfer five elements of standing charges (the adjustment allowance, headroom allowance, profit allowance, payment uplift and levelling costs) entirely to the unit rates.
Shift some policy costs to general taxation.
Revise the ratio of operating costs paid through standing charges versus unit rates to increase the amount on unit costs, thereby delivering an incentive to the energy market to drive down excess costs such as marketing.
Reduce the standing charge elements of network costs by 10%, funded by excess shareholder profits.
If all these options were taken together (i.e. changes to standing charges and unit costs) these proposals would reduce the total energy bill for the average household by £214.22 a year.

Dylan Johnson, one of the analysts involved in the report, said:

“The comprehensive changes we have suggested would bring down standing charges and could also mitigate negative distributional impacts of standing charge reform previously identified by Ofgem. We would urge new ministers to meet with industry, consumer groups and experts to analyse how we can change standing charges in a way that is fair to all households.”

A spokesperson for the End Fuel Poverty Coalition, commented:

“Standing charges are an unfair flat tax on every energy consumer. Every household pays through the nose just to be connected to the grid, even if they use no energy.

“In the past there has been caution about reform due to the potential impact of change on households with a high dependency on energy for medical needs, we still need further detailed analysis of these options by Ofgem to ensure that this group is not penalised.

“However, this report does indicate that reform of standing charges may actually be possible in a fair way. It will need Ofgem, the next Government, energy industry and consumer groups to work together to make it happen. The prize of cutting standing charges in half before this winter should be one which new Ministers seize upon.”

Jonathan Bean from Fuel Poverty Action added:

“Millions of us are suffering energy starvation due to high standing charges that leave no money for heating, hot water or power. Many on prepayment meters get cut off. This cruel energy system needs urgent reform by the new Government.”

Warm This Winter spokesperson Fiona Waters said:

“The energy crisis has already left bill payers £2,500 out of pocket since it started three years ago and we know energy bills will go up again in October.

“People up and down the country are literally at breaking point, are still paying 50 percent more for energy and at the heart of these unfair bills are the standing charges. The public are crying out for action now.

“The next UK Government will need to act quickly, bring down bills for good, end energy debt, improve housing standards through insulation and ventilation and also make Britain a clean energy superpower so we are not at the mercy of profiteering global oil and gas giants.”

For customers in energy debt, campaigners have also called for a universal, consistent, nationwide, debt matching programme funded by the £1.3bn customers are paying through bills for energy debt costs this year.

ENDS

Standing Charge Reduction Analysis by Future Energy Associates is available to download: https://www.endfuelpoverty.org.uk/wp-content/uploads/Standing_Charges_Final.pdf

Public backs social tariff to cut vulnerable households’ energy bills

The public have given their backing to the next Government radically altering the support available to households with their energy bills.

New polling by Opinium for the Warm This Winter campaign has revealed that 57% of the public back a social tariff, which is designed to offer cheaper energy to vulnerable households.

While 32% were neutral or didn’t know if they backed it or not, just 11% of the public opposed the proposals.

A social tariff is a discounted energy bill for people in greatest need, such as those people that have low incomes and are elderly, have young children or rely on energy for medical needs.

The cross-party House of Commons Energy Security and Net Zero Committee of MPs recommended last year that this be introduced along with other reforms to help vulnerable households stay warm each winter.

Voters of all parties backed the plans with 68% of 2019 Labour voters, 60% of 2019 Lib Dems and 54% of 2019 Conservative voters supporting a social tariff. The policy is most popular in Scotland (61%) and even in London more than half back the proposals (51%).

When it comes to paying for the policy, a quarter of voters believed that it should be fully funded through the energy industry (producers, networks and suppliers). A similar number backed a mix of Government funding and energy industry contributions.

There was less support for other proposals, such as contributions via energy bills or paying solely for the policy through general taxation.

The updated energy industry profits tracker shows that over £427bn in profits have been generated by firms since the start of the energy bills crisis, up £7bn since the last update in April 2024. An estimated £1,100 per household in profit has been generated by network operators and transmission firms alone. [2]

A spokesperson for the End Fuel Poverty Coalition commented:

“Protecting vulnerable consumers from energy prices that remain way above 2021 levels is a popular and easy to implement policy that the next Government must prioritise.

“The public would support this being paid for by the whole energy industry. Producers, transmission firms, network operators, market traders, suppliers and their supply chains could all chip in through their profits to make this happen.”

Warm This Winter spokesperson Fiona Waters said:

“Energy bills will go up again in October and years of staggering prices have taken their toll.

“We now know the true cost of the crisis which will be with us for the foreseeable future. Customers are already £2,500 out of pocket because of Britain’s broken energy system, people are turning to loan sharks to pay their energy bills, millions of people are living in energy debt, in cold damp homes and many are experiencing a mental health crisis driven by high bills.

“This is why we need the next Government to act quickly after the election to end energy debt, protect households from the volatile global energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower.”

On energy debt, campaigners have also called for a universal, consistent, nationwide, debt matching programme funded by the £1.3bn customers are paying through bills for energy debt costs this year.

Experts have also recommended a ban on energy firms from selling on debt to debt collectors, better regulation of energy debt with energy debt and debt collection agencies used by energy firms to be subject to Financial Conduct Authority rules and more training for energy firms’ staff in recognising illegal money lending.

Dan Scorer, Head of Policy and Public Affairs at Mencap said:

“People with a learning disability often use more energy for essential mobility, health and sensory needs.

“Too many are being left in fuel poverty: nearly 40% of people who responded to a Mencap survey said they had kept their heating off despite being cold. Over a quarter said they avoided switching lights on to save money.

“Whoever forms the next government must immediately tackle the energy affordability crisis by introducing an energy social tariff so people with a learning disability can live happy and healthy lives.”

Graham Easterlow, CEO of East Durham Trust, said:

“We have seen a 90% rise in household debt involving energy bills. Our debt centre used to write off a majority of unsecured debt made up of credit cards, loans and store cards, now we are seeing household bills of thousands of pounds being written off through debt relief orders.”

More than 41,000 members of the public have also signed a 38 Degrees petition, demanding a social energy tariff for vulnerable people, further demonstrating public support for the measure. Matthew McGregor, CEO at 38 Degrees, said:

“No one should be left in the cold for yet another winter – whether it’s struggling families, people surviving on limited pensions or those with disabilities who may need extra power.

“Voters want to see the burden of enormous energy bills lifted off the shoulders of those struggling the most, with support funded by the huge profits the energy industry is raking in.”

Maria Carvalho, Campaigner at health charity Medact added:

“Homes are the foundation of good health and no one should be left to freeze in their own home. Health workers are working tirelessly but can only plaster over the impacts of cold homes, from respiratory conditions to child development. At the same time the crisis of cold homes costs the NHS more than 2.5 billion a year.

“Despite health workers’ best efforts, the effects of treatment can’t last if patients go straight back to a cold home where they are struggling to cover their sky high bills. The solution to this public health crisis lies in energy reforms like a social tariff which would mean that no one is cut off from their basic right to energy.”

ENDS

[1] Opinium conducted an online survey of 2,185 nationally and politically representative UK adults between 29th and 31st May 2024.

[2] Data as at 6 June 2024. Researchers examined the declared profits of the 20 firms the End Fuel Poverty Coalition is most asked to comment on. This sample of the industry ranges from energy producers (such as Equinor and Shell) through to the firms that control our energy grid (such as National Grid, UK Power Networks and Cadent) as well as suppliers (such as British Gas). It does not include supply chains nor market trading firms.

Energy giants have pocketed just under £427 billion in profits since the energy crisis started according to a new analysis of company reports. Over £34 billion of these profits (the equivalent of over £1,153 per household) are thought to be made by the firms and business units responsible for electricity and gas transmission and distribution. These are the “network costs” consumers pay for maintaining the pipes and wires of the energy system and are usually paid for through standing charges on energy bills. Standing charges have risen 147% in recent years for electricity and 15% for gas.

The last update was on 1 April 2024 which showed industry profits of £420bn with £30bn from networks and transmission.

The data was compiled by freelance business journalist David Craik. David’s experience has included writing business and city news and features for national newspapers and magazines such as The Daily Mirror, Sunday Times, Wall Street Journal, Scotsman and Daily Express. Much of his content focuses on company financial results and reports in the energy sector and on personal finance issues including wealth management, property, investing and managing household budgets and bills.

If any firm wishes to inspect or correct the records, please email info@endfuelpoverty.org.uk.

Call to end the punishment of energy debt

Households in energy debt are being punished by a system designed to trap them in years of misery, according to new figures.

The data from the Warm This Winter campaign has revealed that two thirds (67%) of people in energy debt say it has caused them emotional distress and two-fifths (42%) say it has caused them to eat fewer hot meals in order to cut down on energy use. [1]

The figures come a month after the House of Commons Energy Security and Net Zero Committee heard how one in five (18%) of households in energy debt are turning to illegal money lenders to pay for their bills and everyday essentials. Among younger households, a quarter (24%) of under 35s and a third (32%) of customers aged 35-44 are turning to illegal money lending.

For many in energy debt, energy firms will suggest moving to a prepayment meter (PPM), which enables customers to pay off their debt every time they top up their meter. But the research indicates that the suffering of households in debt on prepayment meters is even worse than for those on direct debit.

Levels of emotional distress increase among PPM customers in debt (93% on PPM / 58% on direct debit) as do the numbers reducing hot meals (60% on PPM / 38% on DD). And the numbers turning to illegal money lending are also significantly higher for PPM customers (36% PPM / 13% DD).

The respondents to the research shared their harrowing stories anonymously with researchers [2]. A prepayment meter customer wrote:

“My energy debt was the reason [I moved] from credited monthly bills towards prepayment meter. It [has caused the] cutting off electricity so many times. It causes disruption and, in my opinion, barely legal. I think that law should protect people who suffer from financial hardship in the context of electricity bills.”

Another respondent said:

“I think it is disgraceful during a cost of living crisis and having severe health problems that the energy companies have been allowed to put up their standing charges so if I do not use any gas or electricity I will pay £390 a year. The price of the electricity and gas is disgraceful and even though the energy firms say they are there to help they send threatening letters stating they will force entry and install a prepayment meter to peoples households, plus if you are late paying they charge £10 then £35 etc.”

One pensioner commented:

“I sit in the house with the lights out and only have my heating on for an hour. What else can I do? My account should not be in debt for the amount I use. It’s disgusting and they are making millions in profits.”

Meanwhile one participant in the research commented on the toll it is taking:

“I work hard and always have done, facing the situation from the energy crisis has left me with little to no money to be able to afford other essentials like clothing. It is incredibly depressing sometimes and not conducive to good health.”

A spokesperson for the End Fuel Poverty Coalition commented:

“Millions of households have fallen into energy debt due to the record high prices. The average household has had to find £2,500 in the last few years just to keep their energy usage where it was. When combined with the ongoing cost of living crisis, this is a figure well beyond people’s means.

“While the energy industry has pocketed the profits, struggling families have been abandoned.

“Energy debt is forcing households to wake up in the morning scared of the consequences of using electricity or gas. It’s time to end the punishment of energy debt.

Campaigners have called for a universal, consistent, nationwide, debt matching programme funded by the £1.3bn customers are paying through bills for energy debt costs this year.

Warm This Winter spokesperson Fiona Waters said:

“The next Government will need to act quickly after the election to end energy debt, protect households from the energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower. All we have had so far from politicians are warm words that they understand the crisis. What we need are concrete promises of action.”

Jonathan Bean from Fuel Poverty Action said:

“A cruel combination of energy debt, prepayment meters and high standing charges is making life a misery for millions of us.”

ENDS

[1] Research was conducted among 500 people across the UK living with energy debt (previous nationally representative polling among 2,000 people revealed that 15% are experiencing energy debt). The interviews among those in debt were conducted online by Sapio Research between April and May 2024 using an email invitation and an online survey.

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample. Sample was selected from Online partner panels.

Key statistics national variations (NI samples too small to be representative):

	All UK	Scotland only	Wales only
Use of illegal money lending	18%	13%	17%
Causes emotional distress	67%	67%	78%
Cuts down on hot meals	42%	30%	57%

Debt and disability

– 21% of people with a disability or long term illness and who are in energy debt have turned to illegal money lenders (18% of those in debt more generally)

– 52% of people with a disability or long term illness and who are in energy debt have cut back on hot meals (43% of those in debt more generally)

– 74% of people with a disability or long term illness and who are in energy debt say the debt has caused emotional distress (67% of those in debt more generally)

[2] Respondents to Q9: Line 130, Line 19, Line 50, Line 60, Line 37, Line 189.

General election candidates asked for views on ending fuel poverty

After years of staggering energy bills, candidates in the General Election have been asked to give their views on the steps they will champion to help end fuel poverty.

New Ipsos polling has revealed that the cost of living crisis is the second most important issue to voters heading to the polls.

Now the End Fuel Poverty Coalition has launched a survey which asks candidates three questions about the cost of energy and the cold damp homes scandal.

Campaigners have claimed that the next Government will need to act quickly after the election to end energy debt, protect households from the energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower.

Voters can also use the survey when MP hopefuls arrive at their door, so they can find out who is most likely to get to grips with fuel poverty and so they don’t have to face another winter choosing between eating and heating.

The poll asks candidates if they think the cost of energy bills is an issue for people living in their constituency and then asks them to rank a set of four solutions in priority order.

The solutions include targeted financial support for energy bills, help to upgrade homes, access to cheaper energy and a long term plan to get off oil and gas.

The final question asks candidates what they will do to help end fuel poverty if they get elected.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Anyone standing for Parliament needs to be left in no doubt that the public is angry about vulnerable people living in cold, damp homes, whilst prices rise and the energy industry profits.

“Candidates will need to go into their new role as an MP ready to take responsibility and demand urgent action on behalf of those they represent. Nothing less will do.”

Research from winter 2023/24 has highlighted that 8.3m million people live in cold, damp homes with the NHS warning that they are more likely to have respiratory problems, respiratory infections, allergies or asthma.

Over a third (38%) of people from households where someone is under 5, pregnant, over 65 or with preexisting health conditions thought they might not be able to afford to put the heating on at all this winter.

Nearly four in 10 UK households (39%) say they cannot afford to insulate their homes.

Scottish public call on Ministers to fix nation’s damp homes

An overwhelming majority of the public have called on the Scottish Government to do more to end the cold damp homes crisis.

New figures published in the Daily Record found that 94% of the public wanted action designed to offset the challenges caused by record energy prices. [1]

The data commissioned by the Warm This Winter campaign found that the public was divided among the solutions they wanted to see, but there was clear support for more financial help for households as well as action on the long term solutions to the energy crisis, such as energy efficiency and insulation support.

51% of the public want more government financial support to help households with high energy bills
50% demand funding and support to install solar panels on homes
38% support more funding to help with insulation in homes
30% say there should be help for businesses to install solar panels or other small-scale renewable projects
29% back better protection for tenants living in rented accommodation
26% think there should be better energy efficiency advice and guidance
25% want more funding to help install heat pumps
3% would like more measures to tackle high energy bills, but don’t know what solutions they would like to see
6% don’t support any of these solutions to tackle high energy bills (respondents could select more than one option)

Recently members of the Scottish Parliament were urged to put political differences aside to unite in support measures that will help end fuel poverty.

In a letter sent to all MSPs and to Scottish Government ministers, politicians were asked to ensure the new First Minister does not abandon government policies which could help end the cold damp homes crisis.

The letter, signed by leading civil society organisations and coordinated by the End Fuel Poverty Coalition and Energy Action Scotland, warned that among the most vulnerable, the crisis is even worse. It came after figures from research among Social Workers Union members found that 69% of Scottish social workers have seen the people they support living in cold damp homes and 400,000 Scots live in uninhabitable conditions.

The campaigners have demanded that MSPs from across all parties to unite in support of:

A Heat in Buildings Bill which is ambitious in its vision for improving the energy efficiency and insulation of the nation’s homes and contains a clear fuel poverty duty enshrined in the legislation.
The current Housing Bill that will enhance tenants’ rights and provide financial protections for tenants during the ongoing cost of living crisis.
Additional Government support in future budgets and legislation to help households cope with the cost of living crisis.
Reintroducing the Fuel Insecurity Fund to help at least those most at risk of harm and struggling in energy debt.
The new Pension Age Winter Heating Payment being fundamentally better targeted than the Winter Fuel Payment that it replaces.
A strengthened framework of support for the renewables and offshore wind sectors and the fastest possible “just transition” for the oil and gas sector, as described in the Draft Energy Strategy and Just Transition Plan.

National organisations that supported these asks ranged from the Poverty Alliance and the Disability Poverty Campaign Group to Fathers Network Scotland, the National Pensioners Convention and Parents for Future Scotland.

Local groups, such as Aberdeen Heat & Power, East Kilbride Housing Association, East Lothian Foodbank, Stirling District Citizens Advice and Tighean Innse Gall also backed the call.

A spokesperson for the End Fuel Poverty Coalition, commented:

“These figures show that while different households back different types of support to combat the cold homes crisis, everyone is united in demanding action from the new First Minister.

“Part of the long term solution to record energy prices is to improve insulation, ventilation and energy efficiency of homes to reduce our consumption of energy overall. Abandoning a Heat in Buildings Bill now would fail people struggling in cold damp homes.”

Frazer Scott, Chief Executive Officer at Energy Action Scotland, said:

“With one in three households in Scotland in fuel poverty and household energy debt rising, it is clear that the public are demanding that more needs to be done to help with the costs of essential energy.

“Almost half of people in Scotland live in an inefficient, expensive to heat and power home. People need to see action from leaders and decision makers that will improve homes, reduce costs and support people to live a decent quality of life.

“The cost of failing to help people will be measured in the misery of far too many of our households, declines in health & wellbeing and ultimately the unnecessary loss of life from living in a cold damp home.” [2]

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

“The First Minister has pledged to tackle child poverty and a good place to start is in the home. All children deserve a warm, dry home, in fact it should be a basic human right for all Scots, which is why policies such as the Heat in Buildings Bill needs to be a central pillar of his parliament.

“Our polling found over half of Scottish people want more government help for people struggling to pay high energy bills, half want to see more funding for solar panels and four in ten more money for insulation.

“The Scottish people have spoken and want a government that will fix the broken energy system by investing in a proper programme of home insulation and homegrown renewable energy to get them off expensive oil and gas and bring bills down permanently. Swinney should listen.”

ENDS

[1] ScotPulse interviewed 2,660 Scottish adults aged over 16 between 7-10 May 2024. Results were weighted by gender and age to Scottish adult population estimates 2021.

[2] Scottish Government published the Scottish House Condition Survey for the year 2022 on 29th February which confirmed that at least 31% of households in Scotland were in fuel poverty and that this was a likely underestimate. It estimated that 37% of households were likely to be in fuel poverty at end March 2023. The 2022 survey identifies that 48% of properties did not reach an Energy Performance Certificate rating of ‘C’, which the Scottish Government determines to be efficient.

Rip Off Britain energy special highlights energy debt dramas

After almost four years of sky high energy bills and repeated Ofgem rulings criticising energy firms’ customer service, BBC’s flagship Rip Off Britain programme has broadcast an energy special.

Billing errors, smart meter malfunctions and soaring levels of energy debt were discussed over the course of the 45-minute long programme, fronted by Angela Rippon, Gloria Hunniford and Julia Somerville.

Warm This Winter data has found that 4.4m households (15% of the public) are in energy debt. This figure is far higher than the 2.5m estimated by Ofgem, which only counts a household being in debt if the debt is more than 90 days old. [1]

Joining the programme was the coordinator of the End Fuel Poverty Coalition, Simon Francis, who said:

“Millions of people are in energy debt and with the prices of energy still 50% above 2021 levels, the strain households are being put under is intolerable.

“Indeed, a fifth of people in energy debt are also turning to illegal money lenders due to the strain on their finances. The ongoing energy bills crisis is causing horrendous implications for households and wider society.

“Warm This Winter campaign research found that £1.3bn of consumers’ money is being given to energy firms to administer bad debt this year. But not all of it will be used to actually write off the debt caused by soaring energy prices and record energy industry profits.

In the programme, the energy industry was called on to back a Help To Repay scheme for energy debt which would see the £1.3bn – or money raised by the Windfall Tax on energy profits – used to match consumer repayments of energy bills.

The programme also offered advice to viewers including one who was struggling to get their energy firm to set a reasonable direct debit. In response, the show highlighted recent Warm This Winter Tariff Watch reports which found that customers who are experiencing bad customer service may be prevented from switching by exit fees which have increased 345% in recent years.

Recently more than 14,000 consumers have signed up to take action to reclaim credit from energy bills built up as their direct debits were set too high. The organisers behind the “Big Energy Credit Claimback” revealed that over a third of households in permanent energy credit are also on low incomes. [2]

Warm This Winter campaign spokesperson Fiona Waters commented:

“Everyone is fed up with being ripped off and used as cash machines by energy suppliers. Even with Friday’s price cap reduction, people are still paying 50 percent more than they were three years ago.

“That’s why thousands have joined our Big Energy Credit Claim Back protest because energy suppliers have been consistently overcharging them and are sitting on £3 billion of credit that is owed to bill payers and those companies have made millions in interest.

“We urge everyone to join us and send a wake up call that we demand change to our broken energy system, You can find out all about that on our Warm This Winter website.”

The programme can now be watched on catch up, iPlayer or online at bbc.co.uk/ripoffbritain.

ENDS

[1] Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

[2] Figure is a combination of sign ups to 38 Degrees and Warm This Winter online actions and was correct as of 1700 on Friday 24 May 2024.

Customers out of pocket due to Britain’s broken energy system

The average household has spent £2,500 more on energy bills since April 2021 than they would have done had prices remained stable. [1]

The data takes into account the Government support schemes that were set up to help households and means that, across the whole country, the additional spend by households on energy over the last three years totals more than £72bn.

The new figures calculated by the End Fuel Poverty Coalition come as Ofgem has lowered the price cap for domestic energy bills by 7%. However, the new cap level means that gas and electricity costs remain 50% higher than in 2021 and are predicted to increase again from 1 October according to expert forecasters. [2]

Recent research by Ipsos found that a third of people expect their disposable income to fall even further over the next year, while the Stop The Squeeze campaign has claimed that fewer than one in ten of the public feel that the cost of living crisis is over.

Meanwhile, the head of the energy regulator told MPs on the Energy Security and Net Zero Committee that prices “are still significantly higher than they were before, and when we look further out our best estimate is that prices are going to stay high and volatile over time.”

A spokesperson for the End Fuel Poverty Coalition, commented:

“Years of staggering energy bills have taken their toll and we now know the true cost of the crisis. Customers are £2,500 out of pocket because of Britain’s broken energy system, people are turning to loan sharks to pay their energy bills, millions of people are living in cold damp homes and many are experiencing a mental health crisis driven by high bills.

Warm This Winter campaign spokesperson Fiona Waters commented:

“Even with today’s price cap reduction, people will still be paying 50 percent more than they were three years ago for gas and electricity.

“They are simply fed up with being ripped off and used as cash machines by the energy industry that week after week announces billions in profits. People want to see investment in a fairer system, especially during these times of global uncertainty when there could easily be another worldwide energy price shock.

“That’s why thousands have joined our Big Energy Credit Claim Back protest and political parties should listen. Voters want to see our broken energy system mended with a shift to homegrown renewable energy and a proper insulation scheme which will both reduce bills and increase energy security by freeing us from volatile global gas prices.”

ENDS

[1] £2,500 and £72bn figures calculated as below. Price cap at 30 March 2021 was £1,042 for the average household. All figures based on Ofgem data. Average household energy bill levels include the relevant Energy Price Guarantee and Energy Bills Support Scheme payments where appropriate (the £52bn net cost of those measures are also borne by the taxpayer). Cap data is based on the prevailing typical domestic consumption values at the time – as set by Ofgem.

Cap change date	Average household energy bill (GBP)	Amount above GBP1,042 per household weighted for the number of months in price cap period (e.g. annual amount above cap halved for periods starting 1-Apr-21, but then quartered for periods from 1-Apr-23)	All households
01-Oct-20	£ 1,042	Baseline
01-Apr-21	£ 1,138	£ 48
01-Oct-21	£ 1,277	£ 118
01-Apr-22	£ 1,971	£ 465
01-Oct-22	£ 2,100	£ 529
01-Apr-23	£ 2,500	£ 365
01-Jul-23	£ 2,074	£ 258
01-Oct-23	£ 1,834	£ 198
01-Jan-24	£ 1,928	£ 222
01-Apr-24	£ 1,690	£ 162
01-Jul-24	£ 1,568	£ 132
TOTAL		£ 2,495	£ 72,340,500,000

[2] End Fuel Poverty Coalition records based on Ofgem price cap announcements and (in italics) Cornwall Insight predictions (last checked 20 May 2024)

Cap change date	Cap change (GBP)	Average household energy bill (GBP)	% change from last period	YOY change	Change from Pre-Energy Bill Crisis	Change from Pre-Ukraine Invasion
Pre-cap		1067
01-Oct-17	-19	1048	-1.78
01-Apr-18	41	1089	3.91
01-Oct-18	47	1136	4.31	8.40%
01-Apr-19	117	1254	10.39
01-Oct-19	-75	1179	-5.98	3.79%
01-Apr-20	-17	1162	-1.44%
01-Oct-20	-120	1042	-10.33%	-11.62%
01-Apr-21	96	1138	9.21%
01-Oct-21	139	1277	12.21%	22.55%	22.55%
01-Apr-22	693	1971	54.35%
01-Oct-22	129	2100	6.54%	64.45%	101.54%	64.45%
01-Apr-23	400	2500	26.84%
01-Jul-23	-426	2074	-17.04%	5.23%	99.04%	62.41%
01-Oct-23	-240	1,834	-11.57%	-12.67%	76.01%	43.62%
01-Jan-24	94	1,928	5.13%	-8.19%	85.03%	50.98%
01-Apr-24	-238	1,690	-12.34%	-32.40%	62.19%	32.34%
01-Jul-24	-122	1,568	-7.22%	-24.40%	59.48%	22.79%
01-Oct-24	71.83	1,631	4.61%	-11.04%	56.57%	27.76%
01-Jan-25	2.76	1,634	0.17%	-15.24%	56.83%	27.97%

Italics = Based on Cornwall Insight predictions

Low income households over-charged for energy direct debits

Over a third (38%) of people in permanent credit to their energy firms live in households with low incomes and may have cut back on energy use or other essentials because the direct debits set by energy firms are far too high. [1]

The new research from the Warm This Winter campaign has been published as over 12,000 bill payers are set to take action to claim back energy credit in protest at Britain’s broken energy system. [2]

Currently UK energy suppliers are sitting on over £3bn worth of customer credit, with nearly a third of UK households (32%) in the black to their energy supplier all year.

New figures suggest that the combined bank interest likely to have been earned on customer credit balances was at least £159m in 2023 alone. [3]

Campaigners from 38 Degrees and Warm This Winter have now launched a “Big Energy Credit Claim Back” drive as the early summer is the ideal time to reset energy bill direct debit payments for the year ahead.

The campaign will make clear that customers should not cancel their direct debits though as this could lead to higher unit costs being imposed on households. It also warns that claiming back credit could lead to higher direct debit payments this summer.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Experts have recently pointed out that while it is sensible to build up credit in the summer months to pay for higher energy use in the winter, customer credit balances have become too high.

“It’s highly concerning that low income households may have been charged too much on their direct debits leaving them to struggle to make ends meet during the cost of living crisis.

“With the huge sums being earned in interest by the energy firms, the least they can do is make sure that credit balances are not running too high, direct debits are set appropriately and the interest they have earned is either paid back to consumers or used to cancel energy debt of those most in need.”

Warm This Winter spokesperson Fiona Waters said:

“Energy companies are sitting on over £3 billion of bill payers’ money whilst providing an appalling service in many cases and making billions in profits.

“The Big Energy Claim Back is a way people who pay by direct debit can issue a wake up call to companies that customers are not prepared to be ripped off anymore and demand energy suppliers provide a fit for purpose service. Whether it’s smart meters that actually work, customer service centres that pick up the phone to fair tariffs, an end to extortionate exit fees and just basically doing their job.”

The protest is backed by groups such as the National Pensioners Convention and 38 Degrees.

Matthew McGregor, CEO at 38 Degrees, said:

“Claiming back the cash we’ve been overcharged is a simple way for busy people to show energy companies they are sick of this broken energy system. That’s why thousands upon thousands of us are coming together to move millions of pounds straight from those companies back into the pockets of hardworking people.

“By claiming back their credit, people can claw back some much-needed cash whilst sending a clear message to energy companies. But this crisis needs proper government action too and this should be a wake up call to all political parties: from cheaper rates for those struggling the most to a proper plan to tackle energy debt, customers need help and they shouldn’t be left to take on the energy industry by themselves.”

Jonathan Bean from Fuel Poverty Action said:

“Yet again energy firms have been caught overcharging us. We demand our money back and proper action from Ofgem.”

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

“People have been struggling to pay their bills and it is shocking to learn that these bills may have been set far too high. Some energy suppliers will act and give credit back, most don’t so consumers need to know how to get their credit back.”

Warm This Winter has launched a guide which includes advice and guidance on how consumers can claim back their credit. The guide also includes areas consumers should watch out for, for example, it is important that people do not cancel their direct debits or else they may be moved onto a higher tariff.

ENDS

[1] USwitch data as of spring 2024.

Ofgem also reports on data, but with a lag. Ofgem data highlights the credit trends over time which show that credit balances range from £2.3bn to £5.1bn during a year. Latest data available is from 2023: https://www.ofgem.gov.uk/retail-market-indicators

Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

[2] Data from 38 Degrees and Warm This Winter campaign supporter databases. Total signed up to take part as at midday on 20 May 2024 was 12,908 individuals.

[3] Analysis of Ofgem customer credit data and based on a standard NatWest business savings account offering 4.25% interest.

Quarter	Customer Credit Balance (Ofgem)	Add 4.25% interest (based on NatWest Business Saver account)	Interest earned on balance (if annual)	Adjusted for quarterly figure (i.e. previous column divided by 4)
1	£ 2,300,000,000	£ 2,397,750,000	£ 97,750,000	£ 24,437,500
2	£ 3,298,000,000	£ 3,438,165,000	£ 140,165,000	£ 35,041,250
3	£ 5,078,000,000	£ 5,293,815,000	£ 215,815,000	£ 53,953,750
4	£ 4,291,000,000	£ 4,473,367,500	£ 182,367,500	£ 45,591,875
Total estimated interest earned on consumer credit balances for 2023				£ 159,024,375

Energy debt causing households to live in fear of loan sharks

Households in energy debt are turning to illegal money lenders to pay for their bills and everyday essentials, according to new research shared with the House of Commons Energy Security and Net Zero Committee today.

Research among households in energy debt by the Warm This Winter campaign, found that almost one in five (18%) have turned to illegal money lending sources in the last 12 months. [1]

Among younger households in debt the situation is even worse, with a quarter (24%) of under 35s and a third (32%) of customers aged 35-44 turning to illegal money lending.

In the next 12 months, the illegal debt mountain is due to grow with two-thirds of households in energy debt due to look for more sources of money. While many will turn to credit cards (27%) and overdrafts (14%), 20% will borrow from family and 14% will turn to illegal money lenders.

The impact on households is that 13% of customers in energy debt owe money to someone they are frightened of. This figure rises to 18% among those living with long-term illness and in households with young children under the age of 5.

Simon Francis, coordinator of the End Fuel Poverty Coalition gave evidence to the Committee and presented them with the research findings:

“The findings are horrific and worse than experts had feared.

“Energy debt is forcing households to wake up in the morning scared of the consequences of using electricity or gas.

“Energy bills and energy debt are a fundamental part of our broken energy system which has led to the cold damp homes crisis we saw this winter.

“The long term solutions are obviously wider than changes to standing charges and tariff reform. We need to see more insulation, ventilation, unblocked cheaper renewables and weaning ourselves off oil and gas to improve energy security.”

The Committee also heard that Time of Use tariffs, one of the main proposed solutions to high energy bills, risk leaving behind millions of households. Research by Survation for campaign group 38 Degrees found that over half (54%) of the public may become energy exiles – unable to access the latest market innovations due to their household circumstances. [2]

Veronica Hawking, acting campaigns director at 38 Degrees said:

“This research shows millions could miss out on time-specific tariffs designed to lower bills, through absolutely no fault of their own. This includes people who rely on energy for medical needs, who need to leave the house at a regular time of day, or who can’t access a smart meter.

“That’s why it’s crucial that any changes to our broken energy system must be underpinned by a social tariff, and why the government’s U-turn on a social tariff consultation was a huge missed opportunity. Whoever forms the next government must make it an absolute priority.”

As well as introducing a social tariff and banning discriminatory energy tariffs, the Committee heard recommendations on tackling the energy debt crisis. These included:

A universal, consistent, nationwide, debt matching programme funded by the £1.3bn customers are paying through our bills for energy debt costs this year.
A ban on energy firms from selling on debt to debt collectors.
Better regulation of energy debt with energy debt and debt collection agencies used by energy firms to be subject to Financial Conduct Authority rules.
More training for energy firms’ staff in recognising illegal money lending.
Reforms to standing charges, including their abolition for prepayment meter customers if certain conditions are met. [3]

Warm This Winter spokesperson Fiona Waters said:

“We like to think of ourselves as a civilised society but surely having heat and power is a fundamental human right for everyone and the idea that people are so desperate they are turning to dangerous loan sharks is horrific.

“It’s extremely worrying to see a quarter of under 35 year-olds in energy debt have no way out other than turning to illegal money lending. This is setting themselves up for a lifetime of being at the mercy of loan sharks and their ilk and I dread to think of the impact this has on young families.

“We need a government that won’t abandon people with unaffordable energy bills and will instead invest in permanent solutions, like home insulation and homegrown renewable energy.”

Jonathan Bean, from Fuel Poverty Action added:

“Energy inequality is growing to dangerous levels, with millions of us starved of energy or forced into dangerous borrowing. We need a fairer system where everyone is safe, and has access to cheap renewable energy.”

ENDS

[1] Research was conducted among 500 people across the UK living with energy debt. The interviews were conducted online by Sapio Research between April and May 2024 using an email invitation and an online survey.

[2] Survation polling for 38 Degrees. Survation polled 2,018 members of the general public, online between 26-29 April. Data were weighted to the profile of individuals aged 18+ in UK. Data were weighted by age, sex, region, ethnicity, education level, and annual household income. The total includes those who are unable to access smart meters, rely on energy for medical or disability needs, have inefficient heating or who are unable to control when they use electrical appliances.

[3] Campaigners have called for reform of standing charges so that:

Investment and all policy costs are moved onto general taxation (and an end to the Ofgem “float and true up process”)
Reductions in marketing, operating, headroom and EBIT allowances for suppliers and moving marketing and operating costs onto unit charges to improve market competitiveness.
Review the £30bn profits in the network and transmission sector and examine the impact of moving network costs onto unit charges.
After reforms and reductions in charges, the end to PPM standing charges should be possible, subject to further analysis and equalities impact assessments.

Surge in energy exit fees since 2021

Bill payers risk being stuck on expensive fixed rate energy tariffs or with poor customer service as exit fees have increased by 345% in the last three years.

Around three million UK households have opted for fixed energy tariffs and the latest Warm This Winter Tariff Watch report shows that the majority have exit fees of more than £100.

The report also reveals 76% of fixed tariffs have annual costs of £1,690 or more meaning they will pay more than the current price cap. The most expensive tariff is a 2 year fixed at £1,712 a year for a typical household – leaving them £84 worse off and with extortionate exit fees of £300.

More broadly, researchers found that exit fees have dramatically increased from an average of £42.06 in early 2021 to a peak of £187.21 on average today (a 345% increase).

High tariffs and high exit fees mean that some customers will be worse off and unable to switch to a cheaper tariff because fees would wipe out any potential savings from moving supplier. It also acts as a trap for those customers who have had poor customer service and are unable to switch supplier.

In the latest edition of Tariff Watch compiled by Future Energy Associates (FEA) who analysed the best deals on the market for customers warns that households could end up worse off if they fix now, even with the latest forecasts that prices could rise again slightly later this year.

A spokesperson for the End Fuel Poverty Coalition commented:

“Exit fees have gone from a minor irritation to a serious concern. Customers who have had poor customer service may now find themselves trapped with their supplier due to these penalties.

“The energy industry is quick to promote the idea that switching will save you money, but the reality is that the small print could leave struggling customers out of pocket.

“Households who are suffering the most are often the ones looking for the most security through a fixed tariff, but we would urge them to only fix if they are absolutely certain it is the right thing to do.

“Checking your bill to get your existing usage numbers and entering these details into price comparison sites is one way of testing the market – but always check that exit fees are under £100.”

Warm This Winter spokesperson Fiona Waters said:

“Yet again energy suppliers are letting customers down with many stuck in fixed rate deals they can’t get out of because of extortionate exit fees and it’s Hobson’s choice for those who want the peace of mind of a fixed rate but will probably end up worse off later in the year.

“It’s just ridiculous and unnecessary that bill payers have to navigate such a complex tariff system where they get ripped off at every level, from rising standing charges to profiteering gas companies, and still face bills that are 60 percent higher than three years ago.

“We need long term solutions from government such as expanding homegrown renewable energy and a mass programme of insulation to bring down bills once and for all.”

Future Energy Associates analyst Dylan Johnson, who helped compile the report, said:

“While we have seen the return of competitive market conditions we are worried about certain consumer groups being left behind. Our data shows evidence that specific suppliers are raising prices in certain regions to absurd levels.”

ENDS

Relevant to England, Scotland and Wales only. For full details, methodology and sources, the full report is available to download: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch_4_Final.pdf