How to stay switched on through the energy crisis...
TAKE BACK CONTROL AS WE HEAD INTO A NEW SEASON OF BILLS, SAYS HARVEY JONES
SUMMER is on the horizon – and that is a massive relief for the millions of people who can’t afford to heat their homes.
But keeping warm is just the tip of the iceberg, as we still need to run our cookers, fridges and washing machines and keep rooms lit.
The average energy bill is on course to hit £1,971 a year for 18 million households on standard tariffs, as the energy price cap was increased by an average of 54% on April 1.
Some 4.5 million prepayment customers will see an even bigger hike, up by £708 to £2,017.
Energy bills are set to increase again from October 1, squeezing many budgets until the pips squeak, says Myron Jobson, senior personal finance analyst at Interactive Investor. “Many cannot afford to have hot showers or do the laundry,” he says.
As the war in Ukraine drags on, energy prices will remain high for the rest of the year.
“This will be felt most by the poorest families who don’t have a cushion of savings to fall back on,” Myron adds.
Shopping around for a cheaper deal is pointless as many comparison sites suspended energy comparisons in September due to the restricted number of tariffs available, including GoCompare Energy.
Spokesperson Gareth Kloet says: “There simply aren’t any competitive deals available for people to compare right now.”
Household tensions are rising too, with six in 10 saying they have argued over failing to turn lights off, leaving electrical items on standby and turning the thermostat up, according to research from City Plumbing. People are also snapping over open windows and doors.
Google searches for information on managing energy bills have shot up by 671% in just one year, as the nation tries to fight back.
Here are some ways to try and put a dent in your bills...
Don’t pay for it if you don’t use it
Most of us will have spent the past few months hoping to cut our energy usage, trying every moneysaving trick in the book. But we also need to keep an eye on our supplier, to make sure it isn’t charging us for energy that we are not even using.
More than half of us pay our energy bills by direct debit, and many suppliers offer a discount to encourage us to do so.
Instead of paying for gas and electric as you use it, suppliers aim to average out your monthly payments, so you may overpay in summer when usage is low, but then pay less in winter.
Many households reported “startlingly high increases to direct debits”, even before the new price cap increased in April.
Suppliers hiked bills in anticipation of rising energy prices, according to consumer champion Which?
If you think you are overpaying, dispute it, says Adam French, Which? consumer rights expert.
“Ask your provider to explain how it has chosen your direct debit amount and if you’re still unhappy, escalate your case to the energy ombudsman.”
Market regulator Ofgem reports “troubling signs” that some companies have hiked direct debits by more than necessary, and is investigating.
It also said some businesses may have been directing customers to tariffs that are not in their best interests, and has called for a meeting with the chief executives of E.ON, EDF, Scottish Power and British Gas owner Centrica to discuss pricing.
Bosses at Bulb and Avro, among those that collapsed last year, will also be questioned. Avro folded owing £90m to customers who prepaid their bills, and Bulb owed £254m.
While suppliers are allowed to raise monthly charges, this must be in line with usage and they must notify you at least 10 days before.
Customers can dispute this amount, or submit an exact meter reading to ensure the increase is linked to their actual usage.
Your supplier should also review your direct debit at least once a year to make sure it matches your energy use, even if you are on a fixed deal.
Complain if you are unhappy
More than two million households have been forcibly switched to a new supplier in recent months after their previous one went bust.
Few had a good transfer experience, with many left waiting months for credit refunds and being left in the dark about the process, according to moneysavingexpert.com.
Those switched to British Gas, Shell Energy and EDF fared worse, while only two firms, E.ON Next and Octopus, got broadly positive feedback from new customers.
One in five customers still hadn’t got their credit balance back more than three months later.
That rose to nine in 10 among customers who moved from either PFP Energy or People’s Energy to British Gas, who were kept waiting four months or more.
Moneysavingexpert founder Martin Lewis said with more than 30 suppliers collapsing, the remaining ones have struggled to pick up the pieces.
“With the collapse of cheap switchers’ deals, they’ve had little choice but to stay there,” he says.
Switchers have been plagued by “missing credit balances, billing delays and poor communication”, he adds, demanding providers up their game.
If you are unhappy, your first step is to raise a formal complaint either directly with your new supplier or via the free tool on resolver.co.uk.
If that doesn’t work, you can visit ombudsman-services.org to reach out to the energy watchdog.
Drowning in energy debt
One in four of us now owes money to our energy supplier, totalling £1bn, after doubling in a year.
Six million households owe £188 on average, up £58 in a year, leaving them without a war chest to battle the rising bills to come, uswitch.com research shows.
The good news is that almost 11 million households are in credit, although their balances have shrunk.
Energy policy expert Justina Miltienyte says the nation’s energy debt is likely to rise as direct debits increase, and the situation will get worse from October.
“If you do not have a smart meter, record your meter readings regularly and submit them to your supplier so your bills are as accurate as possible,” she adds.
If you are in credit, it’s probably best to leave the money with your supplier, so it can act as a buffer during the autumn and winter.
“If you are behind on your bill payments, or your energy account is going into debt, speak to your supplier as soon as possible, as they may help you find a solution,” Justina says.
If you do not have a smart meter, record your meter readings regularly and submit them to your supplier so your bills are as accurate as possible
Energy policy expert Justina Miltienyte
What help is available?
If you are struggling to afford energy bills, seek advice from charities such as Citizens Advice, turn2us. org.uk or stepchange.org.
The big energy firms all have
hardship funds that can offer assistance if you or someone you know is struggling to pay.
The Government is extending the Warm House Discount scheme to cover three million households, offering low income households a one-off annual discount on their electricity bill, worth £140.
In October customers in England, Scotland and Wales will receive a £200 rebate on their energy bills. However, they will have to repay this at £40 a year for five years, starting from April 2023.
Nick Hill, money expert at the Money and Pensions Service, said if you are worried about missing gas or electricity payments, contact your supplier to agree a payment plan.
“It could review your bill, agree more affordable payments methods, give you a payment break or more time to repay,” he says.
If you have already missed more than one payment and cannot come to an agreement with your supplier, you can contact moneyhelper.org.uk for free, impartial debt advice.
Beware false economies
Experts recommend homeowners get all gas appliances such as boilers, cookers, fires, flues and pipework, serviced annually by a qualified engineer on the Gas Safe Register.
The average cost is £80 and it prevents potentially more serious issues. If your boiler breaks down, call-outs cost up to £200 and repair costs average £2,333. Not getting regular safety checks could also invalidate warranties or conditions of insurance policies.
Worryingly, a third of people have said they are likely to skip essential home gas safety checks this year, according to a Gas Safe Register survey.
You can find and check an engineer at gassaferegister. co.uk or call 0800 408 5500.