Customers face £30 monthly price hike when energy suppliers go bust

Customers who are moved to a new energy firm after their supplier goes bust face paying almost £30 more per month, according to Citizens Advice.

The energy watchdog has warned people will face “desperate choices” this winter due to rising energy costs, with those on the lowest incomes being the hardest hit.

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What is the current situation?

As of Tuesday 28 September, more than 1.5 million people had been affected by energy supplier failures.

The energy price cap is due to rise by £139 for people on default tariffs and £153 for people on pre-payment meters on 1 October.

Industry experts predict as many as 60 energy companies could go to the wall in 2021, with Igloo Energy, Symbio Energy and Enstroga the latest companies to go bust.

How will it affect those on low incomes?

Citizens Advice has warned that those on low incomes will be hit hardest when their energy suppliers go bust.

Those who lose their Warm Home Discount if it is not carried over when they are moved to a new supplier could be £17.40 a week worse off, while those on Universal Credit as well as the discount stand to lose £37.40 a week when the benefit is cut.

The charity warns many will have to make “desperate choices” this winter due to fuel poverty - including turning off fridges and freezers, relying on hot water bottles and requesting support to buy extra duvets and blankets.

35% of people are worried they will struggle to pay their energy bills this winter, rising to 45% of those earning less than £21,000 per year and 44% of households with children, a survey by the advisory service found.

What has been said?

Citizens Advice is calling on government to not go through with the planned Universal Credit cut which would negatively impact thousands of people.

The watchdog has also urged ministers to introduce emergency winter grants for those on the lowest incomes.

Chief executive Clare Moriarty said: “We’re particularly worried about those who’ll face desperate choices this winter because of the cumulative impact of soaring bills, the planned cut to Universal Credit and inflation.

“The government and Ofgem must guarantee that the Warm Home Discount will be continued for people moving to new energy suppliers.

“People on the lowest incomes should be able to access emergency winter grants so they can stay warm in the cold months ahead.”

This article originally appeared on our sister site, NationalWorld.