Struggling households need more help with bills, energy industry says

Energy firms in the UK, represented by Energy UK, have called for the government to provide additional assistance to struggling households grappling with soaring energy bills this winter. The high prices have left some individuals requiring extra support beyond the existing £150 Warm Home Discount. Suppliers are striving to help their customers, but the current system is failing to offer adequate assistance to those in need, according to Energy UK's chief executive, Dhara Vyas.

She proposed a new social discount scheme to create a more effective system for all. Ofgem reported a record £4.7bn in unpaid energy bills at the end of last winter, which has since increased due to rising wholesale energy prices following the Iran war in February. The upcoming price cap for October onwards is expected to be higher than previous years, and a 4% increase is anticipated.

Cornwall Insight predicts that this rise will affect household bills during the first half of the coming winter. The price hike will surpass the impact of Prime Minister Andy Burnham's decision to remove VAT on household electricity bills from October. While the Warm Home Discount reaches six million customers, an additional 2.5 million people require support due to medical conditions or energy-consuming homes.

Energy UK estimates that its proposed new scheme would cost £1.9bn, nearly double the current scheme's cost, but could provide up to £450 in support to some households. The last price cap similar to the current level was in July 2023, with significant government spending to support households during the Ukraine-Russia conflict. Combining personal data sources and securing additional taxpayer funding for the scheme might raise concerns.

However, Adam Scorer, chief executive of National Energy Action, supports the government's efforts to provide relief to people in fuel poverty by working with energy companies and charities to design a suitable program.