HOUSEHOLDS have been hit by an energy market crisis with suppliers collapsing and prices rocketing.
There is little sign of the market cooling down in 2022 – here are the key energy changes to be aware of this year.
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Millions of families saw energy bills rise towards the end of 2021.
Record wholesale gas prices meant smaller suppliers struggled to survive and around 30 ceased trading.
Meanwhile, many households were forced to the brink as their bills started soaring.
The energy price cap, set up by regulator Ofgem to protect out-of-contract households, climbed from £1,138 to £1,277 in October 2021 and another increase is on the way.
But there are more changes to come this year.
Here is what households need to prepare for when it comes to their energy bills for the rest of 2022.
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Cold Weather Payments end – March 2022
Cold Weather Payments worth £25 are dished out to eligible households when temperatures are recorded as zero degrees or below on average for seven consecutive days.
The idea is that these help cope with the extra heating costs for people on low incomes.
You’re eligible for the cold weather payment scheme if you’re in receipt of one of the following benefits and meet certain criteria:
The payments for the latest winter period will close at the end of March as the warmer weather months begin.
Warm Home Discount scheme ends – March 2022
The Warm Home Discount scheme is run by individual suppliers and provides a a one-off payment or money-off bills worth £140 that goes towards heating costs during the winter months.
Claimants on the guarantee element of pension credit will be eligible for the payments as will some people on a low income who get certain means-tested benefits.
You need to check if your supplier offers the discount and apply directly with them.
It has been provided in the past by firms including British Gas, Eon and Shell Energy.
The discount is only offered between October and March so will stop next month.
Winter fuel payment application deadline – March 2022
Winter fuel payments are tax-free payouts for anyone receiving the state pension to support higher heating costs during the winter.
Eligible older people can get between £100 and £300 depending on their age.
There are more details on exactly who earns what amount on the government website.
These amounts are paid automatically if you get the state pension.
But you need to apply for the support if you are eligible but haven’t taken your state pension yet or if you live abroad in Switzerland or another EEA country.
The deadline to apply for this winter’s payment is March 31 2022.
You can make a claim by contacting the Winter Fuel Payment Centre either by post, phone or email.
The contact details will depend on where you live and a full list can be found on the gov.uk website.
You’ll need the following information to hand.
- your National Insurance number
- your bank or building society details
- your BIC and IBAN numbers if you live in the EEA or Switzerland
- the date you were married or entered into a civil partnership (if appropriate)
You also need to tell them if you were in hospital or residential home during what’s known as the qualifying week of September 20-26, 2021.
Energy bill rebate consultation – spring 2022
The Treasury has announced an energy rebate scheme to help households cope with some of the costs of energy price cap increases that are coming in 2022.
Under the plans, Chancellor Rishi Sunak said all domestic energy customers, including those on standard and pre-payment meters, will receive £200 off their energy bill.
The rebate will be applied in October 2022 and then has to be repaid at a cost of £40 annually for five years from April 2023 when energy bills are expected to be lower.
But first the Treasury said it will consult on how the scheme will work during the spring.
Critics have already questioned the fairness of being saddled with extra debt from next year and many are asking for an opt-out.
Price cap increases to £1,971 – April 2022
The first energy price cap change of 2022 will take place from April 1.
Ofgem said last week that the cap will rise from £1,277 to £1,971, pushing up bills for 22million households on standard tariffs.
This is just a figure based on typical usage and the cap is on the cost per unit that a supplier can charge.
This means your bill could still be more.
Experts have warned that due to the high wholesale costs and lack of competition in the market, it is hard to find better deals to switch to and customers may be better off sticking with default tariffs for now.
Energy bill rebates paid – October 2022
The energy bill rebate is due to be applied to customer accounts from October 2022.
The government will provide funding to all suppliers for them to pass
on to their domestic energy customers.
This should give all domestic customers £200 off their bill.
The spring consultation will dictate how this works exactly and any changes.
New price cap set – October 2022
Ofgem will consider prices on the wholesale energy markets in August 2022 to set a new price cap to go live in October 2022.
Analysts at Cornwall Insight have warned that uncertainty over energy imports and increased extreme weather events could continue pushing prices up and take the cap beyond £2,000.
Some of the rise in the cap could be covered by the energy bill rebate although that payment was set up to cover April’s rise so another hike could actually outweigh any savings.
Warm Home Discount – October 2022
Suppliers will reopen their Warm Home Discount schemes in October once the colder months begin.
Eligible households will be able to get £150 towards heating costs during the winter months as the rate is being increased from the current level of £140.
You will need to check if your supplier offers the scheme and apply directly with them.
There are two ways you can be eligible for the payment:
- If you get the guarantee credit element of pension credit you’ll be in what’s called the “core group”
- If you’re on a low income and meet your supplier’s criteria you’ll be in what’s referred to as the “broader group”.
If you’re in the core group of people who get the discount, on July 4, 2021, all of the following must have applied:
- Your energy supplier was part of the scheme
- Your name (or partner’s name) was on the bill
- You were getting the guarantee credit element of pension credit (even if you get savings credit as well)
You may be part of the broader group if you are on a low income and get certain means-tested benefits and your energy supplier is part of the scheme.
It’s up to each provider who gets the discount and each has different eligibility criteria.
You have to apply to them directly and they have a limited amount of people they can offer discounts too, so the earlier you apply the more chance you have of getting the discount.
Cold Weather Payment – November 2022
Eligibility for cold weather payments will start again from November 2022.
Low-income households or those on benefits may be entitled to payments of £25 to help with heating costs if the temperature falls to zero degrees or below for seven consecutive days on average.
Some of the chilliest regions got payments seven times during this winter.
Winter fuel payments – November 2022
People receiving the state pension will be eligible for winter fuel payments to help cover rising heating costs from November.
Payments, worth £100 to £300 depending on your age, are usually made between November and December.
You should receive these automatically if you get the state pension.
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