The government needs to sharply increase the discounts it gives UK citizens to tackle rapidly rising energy bills, according to consumer rights champion Which?.
Rebates given to fight a cost-of-living crisis and rocketing inflation should increase across the board from £400 ($472) to £1,000, and for families on the lowest incomes the increase needs to include an extra £150, Which? said on Thursday.
Which? said its recommendation was only for the period up to March, and it came as the next price cap rise is set to be announced on Friday by regulator Ofgem.
Analysis by energy industry consultant Cornwall Insight indicates that households will face an 80 per cent rise in bills going into the winter period. Annual energy bills are tipped to hit £3,554 from October, and then rise to £4,650 from January.
Which? is calling on the government and Ofgem to begin an immediate review of retail energy pricing, including the price cap.
“With energy bill predictions continuing to spiral, the government must increase the Energy Bills Support Scheme by at least 150 per cent, or risk pushing millions of households into financial distress this winter,” said Rocio Concha, Which?'s director of policy and advocacy.
“While increased support will provide relief for many, it is not a long-term solution. The government and regulator must urgently undertake a wide-ranging review of retail energy pricing — including the price cap — to build a fair and affordable system for consumers.
“The government must also develop a programme to urgently improve the insulation of homes — as this will help to reduce people’s energy costs for years to come.”
Which? said the government’s financial support for all households must increase from the current £400 to £1,000 — or from £67 to £167 per month from October to March — after Cornwall’s analysis.
The existing support package is inadequate to protect living standards for those on the lowest incomes and would lead to considerable financial and social hardship, it said.
Which? warned that even a 150 per cent increase would be insufficient for families on the lowest incomes, and said the government must provide them with an additional one-off minimum payment of £150 to ensure the most vulnerable have the support they need.
It said the additional support would only be a temporary solution until March, when energy prices are expected to rise again and remain high throughout 2023.
Assuming Cornwall’s figures are correct it will mean that between October and April — which includes the coldest months of the year — the average household will pay the equivalent of £4,102 per year for their gas and electricity.
It would be a massive jump from today’s £1,971, which is already a record, and much higher than the £1,138 seen last winter.
Half of UK households could be in fuel poverty in January as a result of rocketing energy prices, EDF Energy's managing director Philippe Commaret has said.
