Martin Lewis: Energy bill crisis is on scale of pandemic – BBC

By Becky Morton
Business reporter, BBC News

This video can not be played
Martin Lewis: Rising prices are a crisis on a scale with the pandemic
The situation with energy bills is "a national crisis" on the scale of the Covid pandemic, Martin Lewis has said.
The consumer expert told the BBC support needed to double to make up for the huge expected rise in bills.
The government said it had "continually taken action to help households".
It comes as a survey by comparison site Uswitch suggested many people are already behind on energy bill payments with total debt owed three times higher than in September last year.
Almost a quarter of households owe £206 on average, according to the survey of 2,000 people.
Uswitch advised people falling into debt to speak to their provider to work out a more affordable payment plan.
The figures come a day after consultancy Cornwall Insight warned energy bills could rise much higher than previously thought in October.
Cornwall also expects bills to increase much more sharply in January, with the average household paying £355 a month, instead of the current £164 a month.
Mr Lewis said according to forecasts, the price cap – the maximum amount suppliers can charge customers in England, Scotland and Wales for each unit of energy – would effectively double between May of this year and October.
The latest price cap is due to be announced at the end of this month by the energy regulator Ofgem.
In May the government announced a package of support, including a £400 discount on energy bills for all UK households and an additional £650 for more than eight million low-income households.
But Mr Lewis told BBC Radio 4's Today programme: "If [the chancellor] is going to be consistent, he will need to double every number in that package."
Ministers are set to hold talks with energy giants on Thursday to discuss measures to ease the cost of living.
However, Mr Lewis said ultimately it was "government alone" which could help by putting "more money into people's pockets".
The boss of Octopus Energy also said he thought the government needed to improve its offer of £400 for households to help with rising energy bills.
Greg Jackson told the BBC that while the initial package of support may have been "right" at the time, "clearly it's not sufficient now and we need to look at a similarly significant assistance from the government for this winter".
Derek Lickorish, chairman of energy supplier Utilita, called for a social tariff, which offers discounted rates for lower income households, to be introduced.
He also said the government needed to "dramatically" increase support by £800 – £1,000 per household.
Chancellor Nadhim Zahawi said the Treasury had been preparing "options" for the next prime minister on what further support could be offered.
However, Treasury officials have stressed that any decisions on major fiscal issues will be decided after the new PM takes office.
Leadership frontrunner Liz Truss rejected the idea of holding talks with Boris Johnson and her rival Rishi Sunak before the end of the contest, saying "now is not the time to pre-empt those decisions".
She denied she was ruling out payments to help with energy bills. However, stressing her support for tax cuts, Ms Truss said her priority was "making sure we're not taking money off people and then giving it back to them later on".
James Gilmour, who lives with his partner and three children in Essex, has taken out a £5,000 loan to help cover his energy bills when they go up in October.
His gas and electricity bill has already doubled from £145 per month to £320 a month and from October he said he will be paying more than £600 per month, according to the latest forecasts.
"As a family of five we simply cannot afford to pay this monthly as we are already getting half way into the month with no money left for food and essentials," he told the BBC.
James, who works in the automotive industry, said the loan was "the only way to survive through this crisis".
Read more here.
There are two main reasons households end up in debt to their supplier: the first reason, their direct debit payments may be set too low to cover the amount of energy being used.
Anyone who finds themselves in that position should contact their supplier as quickly as possible to avoid a sudden bill shock, and give it their correct meter readings.
The second reason is because people are just not keeping up with their payments.
The Uswitch survey revealed that in addition to the group in debt, eight million households have no credit balances, meaning they have no cushion against the bill rises this winter.
"This is an alarming situation, as summer is traditionally a time when households are using less power for heating, which helps bill payers to build up energy credit ahead of the winter," said Justina Miltienyte, head of policy at Uswitch.com.
An Ofgem spokesperson said its "priority" is to "protect consumers" and make sure suppliers treat their customers in a "fair and reasonable manner".
A spokesperson from the Department for Business, Energy and Industrial Strategy said: "We know the pressures people are facing with rising costs, which is why we have continually taken action to help households by phasing in £37bn worth of support throughout the year."
Separately on Wednesday, E.On reported first-half profits of just under €4.1bn (£3.5bn), which was about €700m below the previous year.
The company, which is one of the UK's biggest energy suppliers, described the energy crisis as "extraordinary", and said it highlighted the need for Europe "to transform its energy system. To be independent of Russian gas. To ensure supply security".
It is worth saying again that the old advice to shop around to find a better energy deal just does not apply anymore. The default price cap, although super high, is the best rate available at the moment, so don't be pushed into signing up for a new fixed deal unless you want to, as you may end up paying more in the long-run.
If you are falling behind on your energy payments, or are unable to keep-up with the increases in direct debits being suggested by your supplier, then the first thing to do is let them know you're struggling.
Making that call might be tough, as it's never easy to admit you're finding things difficult, however it's likely to be the best protection for your household this winter.
Taking action is important because there is an extra layer of legal help available for people who are unable to pay, which forces suppliers to work through lots of different options with their customers. That includes agreeing a payment plan, giving temporary credit for prepayment customers, and arranging for payment directly through benefits.
Crucially, making that call to explain that you're struggling means they can't just cut you off.
How have you been affected by the rise in energy prices? Are you in energy debt? Email haveyoursay@bbc.co.uk.
Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:
If you are reading this page and can't see the form you will need to visit the mobile version of the BBC website to submit your question or comment or you can email us at HaveYourSay@bbc.co.uk. Please include your name, age and location with any submission.
'I'm borrowing £5,000 to pay my energy bills'
What can I do if I can't afford my energy bill?
Energy bills forecast to hit over £4,200 a year
People turning back to cash as living costs soar
Trump does not oppose bid to unseal search warrant
Armed man shot after trying to 'breach' FBI office
UN alarm as Ukraine nuclear plant shelled again
The mystery deaths of two Saudi sisters in Sydney
'I'm a different person after having monkeypox'
The librarian who defied the Taliban
'I was scared to even search the word abortion'
High and low-tech ways to tackle India's water crisis
Why Hong Kong is seeking solace in Cantopop
Netflix dark comedy on domestic violence wows India
Why Sir Ganga Ram's legacy lives on in India and Pakistan
The chef leading Italy's 'pasta revolution'
The best public pools around the world
Why open relationships are on the rise
The ejector seats that fire through the floor
© 2022 BBC. The BBC is not responsible for the content of external sites. Read about our approach to external linking.

source

Leave a Comment