Half the country’s energy bill payers believe support from the government and energy industry has been inadequate over the last year amid soaring wholesale costs.
USwitch has published a survey of 2,000 energy users across the income spectrum conducted by Opinium, with two fifths of bill-payers (43 per cent) saying the government needs to do more and a third suggesting market regulator Ofgem needs to intervene in the looming crisis.
Meanwhile three in ten hold their supplier responsible, which is an unsurprising result considering dozens have collapsed since September, leaving two million customers in need of rescue from the costly supplier of last resort process.
It is now widely expected that the consumer price cap – currently set at £1,277 per year for average use after a 12 per cent hike last October – will rise by as much as 50 per cent in April, taking annual energy bills up to £2,000.
Eight per cent of respondents said they could not cope with any further expenses, which would mean two million households could be pushed into debt if the results reflected nationwide trends.
Two-fifths of people in fuel poverty surveyed also revealed they have struggled to pay for energy over the past year, compared to 17 per cent in better-off households.
Alongside the anticipated hike in the price cap, many consumers have seen their fixed term payment plans conclude during the crisis, with some losing their deals during the onboarding process to new suppliers.
Others have seen similar payments plans conclude during the energy crisis, whose fixed deals have ended during the energy crisis have seen their bills soar as they have moved onto standard variable tariffs at the current price cap level of £1,277.
People in fuel poverty pay a fifth (22 per cent) more for their energy than the UK average, spending £109.80 a month compared to £90.30 for better-off households. This is partly because people in fuel poverty are 88 per cent more likely to be on a more costly prepayment meter.
The survey also suggest people worrying daily about how they will pay their bills has risen by more than half (55 per cent).
Only a fifth of households (22 per cent) were concerned this time last year, compared to a third (34 per cent) who are now regularly worrying.
USwitch continues calls to expand Warm Home Discount scheme to protect vulnerable households
Price comparison service USwitch has previously called on the government to increase targeted support for poorer households that could be vulnerable to soaring energy bills this April.
It has now reaffirmed its stance following today’s published survey and is continuing pressuring Downing Street to increase the Warm Home Discount scheme from its £140 annual rate to counter the soaring costs of energy bills.
Richard Neudegg, head of regulation at Uswitch, said: The government needs to do much more, and fast, to scale up its targeted support for vulnerable households in a way that reflects the cost increases coming in April. Now we are in the depths of winter, and people are already struggling with their bills, it is time for the government to act.”
Similar calls to protect low-income households were made by the Joseph Rowntree Foundation in its state-of-the-nation report yesterday.
Downing Street is reportedly weighing up moves to expand the Warm Home Discount scheme, potentially quadrupling its reach from 2.2m of the poorest households to 8.5m.
The Financial Times has reported the government also mulling over potential loans to the energy sector, including a potential system where it suppliers public funds during market shocks to mitigate consumer costs, before reclaiming the money when prices cool down.
Calls for further state intervention in the market have faced pushback in recent days from think tanks such as the Institute of Economic Affairs (IEA) and the Adam Smith Institute (ASI).
Speaking to City A.M., the IEA’s energy analyst Andy Mayer told City A.M. the current spike in energy prices is “rooted in the government’s interventions in the energy market”.
Mayer said: “More intervention is not a solution and will make these problems worse. This policy is a mask, when what the market needs is a vaccine.”
Instead of introducing more measures to control the market, the IEA analyst suggested that the UK should give the green light to new developments in the North Sea and support onshore fracking, which would help shore up the country’s energy supplies and potentially contain soaring prices.
John Macdonald, ASI’s director of strategy added: “The government has deprived the market of its ability to operate under pressure. The price cap forces providers to sell at or near a loss, stifling competition and distorting the price signals that allow consumption and investment to shift with scarcity.”