Are we heading towards an energy cliff edge?

Ollie Gray, business development director, Charis

So, are we better off or worse off this spring when it comes to our energy bills?

Unfortunately, despite falling wholesale costs, the average household bill is still set to rise to £3000 in April, and many will need to be tightening their belt just that little bit more again, particularly if we end up having a cold Easter! This is primarily because the EBSS and the government’s energy price cap are coming to an end, and as consumers, households will not benefit from the reduced wholesale prices until at least July.

With so much volatility in the market, it is imperative that the government works with the energy sector to try and instil some sense of stability. The worry and fear that households experience has as much of a devastating effect as the inability to pay their bills and is contributing to the overall state of the nation’s mental health, leading to an increase in rates of anxiety and depression.

For some time now, there has been an increasingly loud call for the introduction of a universal social tariff for the most vulnerable in our society. The desperation of many thousands of households unable to pay their bills has seen the scandalous increase in the number of prepayment meters being installed without any form of consultation with the householder, placing them automatically on the highest tariff and thereby worsening their overall situation.

While we agree with Martin Lewis that the price cap increase should be postponed (if not cancelled altogether), this must be done in line with a move towards establishing a social tariff. This universal social tariff will be a stable and consistent guarantee for those who are most vulnerable, removing much of the uncertainty and unpredictability for those who are more prone to the devastating mental health problems associated with poverty.

In 2022, Charis processed a total of £17.5 million in funding – nearly 70 per cent of this was on fuel vouchers – while this represents just a 10 per cent increase on the previous year, in the last few months we have been selling a higher proportion of different kinds of vouchers as well. These figures are indicative of the growing sector of UK households who are falling into the poverty trap, whereas before they would be living within their means. Until incomes start to balance out again against the cost of living, the reliance on government support funds is only going to get bigger.

…/ends