Charity warns of ‘very difficult winter’ ahead for low-income households amid rising bills, cut to universal credit and end of furlough
Last modified on Thu 23 Sep 2021 07.57 EDT
The prospect of higher energy bills has prompted a deluge of calls to Citizens Advice with the charity warning of a “very difficult winter” for households on low incomes.
Seven small energy firms have failed in recent weeks due to record energy market prices, forcing their customers on to more expensive deals with a new supplier.
Dame Clare Moriarty, the chief executive of Citizens Advice, said the prospect of higher bills had come on top of dealing with any potential fallout from the end of the government’s job subsidy scheme as well as the £20 a week cut to universal credit.
The charity was seeing a big increase in people seeking information and advice on energy suppliers but also seeking help coping with the wider cost of living squeeze.
“We are seeing people come to us because, more broadly, they’re just seeing family finances being really, really squeezed,” she said. “We know that this is going to be a very difficult winter for many people on low incomes.”
A further 800,000 households fell victim to the turmoil in the energy market on Wednesday as both Avro Energy and Green went bust. That means seven energy companies have failed in a little over six weeks, with a total of more than 1.5m households being shunted on to a new supplier and likely having to pay hundreds of pounds more for their gas and electricity each year.
People whose energy supplier has collapsed should “stay calm”, advised Moriarty. They would not lose their gas and electricity connection and would be transferred by Ofgem to a new supplier, a process that could take a few weeks, she told the BBC Radio 4 Today programme. Credit balances would transfer over as would money owed to a supplier.
However, the fact that customers of a failed supplier could end up having to pay more for heat and light, made it a “very, very worrying time” for people, she said.
“People will be transferred to a new supplier,” said Moriarty. “They won’t be transferred, necessarily, on the tariff they were on previously. So if people were on particular deals they will tend to transfer on to the standard tariff of the new supplier. So that may mean that people’s bills will go up.”
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