IN October, energy bills are predicted to soar to £2,800 a year on average – that’s a rise of more than £1,600 a year in just 12 months.
Earlier this week, the Chancellor Rishi Sunak announced a new £15billion package of support.
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This week, we answer your questions — and explain what help is available.
WHAT help did the Chancellor announce?
This week Rishi revealed every household will get a £400 energy discount on bills.
Direct debit customers will have the money credited to their accounts by energy firms.
Pre-payment meter customers will get a voucher or automatic top-up. It will be paid over six months.
More than eight million households on means-tested benefits, including Universal Credit, will get a one-off £650 payment.
It will be paid in two lump sums — one in July and a second one in the autumn.
More than eight million pensioner households will get an extra £300 one-off payment. It will be paid with the £200-£300 winter fuel payment in November and December.
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Around six million people with disabilities will get an extra £150 payment in December.
And another £500million has been added to the Household Support Fund, which is dished out by local councils.
WAIT, didn’t he previously announce help?
Yes. In February he announced a £150 council tax rebate to homes in bands A to D. Thousands of payments have been paid but councils have until October to distribute the cash.
Mr Sunak also announced a £200 energy rebate.
This was a loan which households would have to repay. However, he has decided to turn it into a grant and increase it to £400.
WHAT’S a windfall tax?
The help is being funded in part by a windfall tax on gas and oil firms.
This is a one-off levy placed on companies by the Government.
It’s designed to make firms pay more tax when they’ve benefited from something they weren’t responsible for.
In this case, it targets energy suppliers who have enjoyed sky-high profits as a result of surging global commodity prices, while customers struggle with rocketing bills.
Mr Sunak announced a £5bn temporary windfall tax of 25 per cent on oil and gas companies to help fund his support package.
But to ease the pain, he is offering tax relief to firms investing in oil and gas extraction in the UK. The money raised from the tax will be handed back to struggling households.
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WHY are energy bills going up again? I thought wholesale prices were down?
The energy price cap went up in April to £1,971 from £1,277 a year, adding £694 extra for 22million households.
Experts now estimate bills will go up to £2,800 a year on average in October. The price cap is based on what wholesale prices are expected to be in the coming months.
That means even if prices have fallen, the cap will still go up if the regulator thinks wholesale costs will be higher in the winter.
IS there any point in getting a fixed deal?
Households used to be able to save hundreds by locking into a fixed rate energy tariff rather than being on the default rate. But this is no longer the case.
Currently the cheapest fixed deal is around £900 MORE than the price cap.
According to Uswitch, the cheapest fix is currently £2,570 a year from British Gas.
But some people may still want to fix, because they want certainty over their bills.
Justina Miltienyte, head of policy at Uswitch, said: “Keep a close eye on the market and run regular comparisons to see what deals are on offer. Sign up to alerts to make sure you’re informed when a good deal comes along.”
WILL reducing my usage help?
Yes, cutting back will lower your bill — but there’s only so much you can do.
And because of the standing charges, unfortunately you can’t reduce your bill to zero.
Some families have resorted to drastic measures such as turning off the fridge to try and save energy use but this is a health risk so should be avoided.
There are some steps you can take such as turning devices off at the wall instead of standby mode and having a shorter shower.
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WHAT help can I get now?
A number of energy suppliers have hardship schemes for those who are struggling.
Bulb is offering grants of up to £140, British Gas up to £750, and Octopus up to £500.
You also might be able to get help from your local council through the Government’s Household Support Fund.
WHAT happens if I can’t pay my bill?
If you’re struggling with bills, don’t bury your head in the sand.
Contact your supplier — it should offer you a payment plan. Some firms will contribute towards your bill if you’re in debt.
Debt charities such as StepChange and National Debtline can offer advice. Use Turn2Us’ benefits calculator to see if you’re entitled to any extra support.
WHAT happens if I think there’s a mistake on my bill?
It is important you do regular meter readings to make sure you’re being charged correctly, or your energy provider will bill you based on estimated usage.
If you think your bill is incorrect, contact your provider with an up-to-date reading. If the problem is not corrected, make a formal complaint.
You can also go to the Energy Ombudsman if you’re unhappy. Free online tools from Resolver.co.uk can help you manage a complaint.
