Consumers face 'horribly difficult and expensive period' over energy bills - Sarah Coles

Energy analysts at Cornwall Insight now expect the price cap to shoot up from an average of £1,971 to £3,582 in October, £4,266 in January and £4,427 in April. It means the 22 million households on the price cap will see their typical monthly bill rise from £164 to £298, then to £355 before hitting £369.

We don’t have to face this entirely on our own, because the government has offered a number of lump sums to help us meet the cost. This included the £150 Council Tax Rebate for everyone in bands A-D, plus the £400 grant for all UK households – paid as £66 in October and November and £67 from December to March – which will be paid to your energy supplier and taken off your bill.

You may also qualify for additional payments, including £650 those on low incomes – split into payments in July and September, £300 for pensioners who get the winter fuel payment – paid in November and December, and £150 for those receiving specific disability benefits – paid from September.

However, even if you qualified for the maximum possible combination – of £1,350 - if these predictions are right, those on the lowest incomes will still have had to find an extra £320 of their own money to cover the costs between April 2022 and April 2023. Those who only qualify for the £400 grant and the council tax rebate, meanwhile will need to find an extra £1,020, which is a horrible stretch for anyone.

The way that these payments have been made, meanwhile, means that larger households with far bigger bills than average received no more help than smaller ones. So if you have a big family on a small income, the pain has been immense. An estimated 35 million people – almost half of us – could be in fuel poverty by October, while 39 million – 54% of us – could be in fuel poverty by January if the forecasts are right.

We’re well aware of the horrible challenges to come, and the Office for National Statistics says 24 million of us are already doing what we can to reduce the amount of energy we use. Those aged 55-74 are particularly likely to say they’re cutting their energy use at home. This is far easier during the summer months, when we can keep the heating off for months, sit in the garden instead of looking at multiple devices and live off salad and BBQs. When the colder and darker months come, saving energy is going to be a much grimmer experience.

The size of the extra sums we need to find means that saving energy won’t be enough. We’ll also have to scour our budgets to free up any cash we can bear. For an awful lot of people, by this stage in the cost-of-living crisis, they have shopped around for everything and cut out every luxury, so this could mean some really horrible lifestyle changes, where everything from where you live to whether you have a car or go on holiday are on the table.

If even this leaves you short, contact your provider, who may offer grants for people in your circumstances. If your provider doesn’t offer anything, check the British Gas Energy Trust, which helps people who aren’t customers too. Citizens Advice are experts in this area, so if you need any help navigating the system, it’s worth asking for help.

You may have seen the ‘Don’t Pay’ group, and might have been tempted by the idea of refusing to pay your bills and hoping so many people follow suit that the energy companies give up chasing you. However, this is really dangerous, because your supplier isn’t ever going to give up.

Not only will missed bills be recorded on your credit record, so you may find it more difficult to borrow in future, you’re also likely to face late payment fees. If your supplier passes your debt to a debt collection agency, it’ll cost you even more. If you keep refusing to pay, your supplier can force you to move to a pre-payment meter, so you can’t use any energy until you pay. If you won’t let them install the meter, they can get a warrant from the court. They also have the power to disconnect you.

There is still some hope that the government will step in. On the one hand the leadership campaign has thrown a spanner in the works because there’s no functioning government to address potential changes to Universal Credit to help those facing the greatest hardship. However, one positive is that both candidates are keen to please, and can’t be seen to be ignoring this crisis. It means this week Rishi Sunak has moved on from promising a temporary VAT cut on energy bills (saving an average of £154 a year) to pledging some sort of direct support for families. Liz Truss, meanwhile, stuck with a pledge to cut green levies (saving an average of £150 a year) until Wednesday this week when she said she hadn’t ruled out direct support, and would do what she could to help people during the winter.

However, at this stage we can’t be sure who will be leading the government by the time the energy price cap rises, or exactly what help will be on offer. It means we’re facing a horribly difficult and expensive period, with very little idea of whether or not we’re going to get enough support. Again, it’s very much like having babies in the house.