MNHQ Here - Worried about your energy bills? National Energy Action will be here Wednesday 23rd Feb to answer your questions

[JuliaMumsnet]

Hello

You may have seen the recent announcement that energy bills will rise in April, and we know lots of you have been discussing your concerns on Mumsnet. On Wednesday 23rd February from 12pm to 1pm, reps from national fuel poverty charity National Energy Action will be here, live on this thread, to answer your questions about what the rises mean, why they are happening and what you can do.

You can post your questions below in advance, from now, or join the Q&A on the day.

Here's what National Energy Action say:
“There’s no doubt we are in the midst of an energy crisis. In the 40 years since National Energy Action first started we have never seen energy bills this high or so many people at risk of fuel poverty. We hear from people who have to sleep in coats and who simply cannot stay warm at home.

“Most people can’t have helped notice their energy bills rose in October when the price cap was raised. Now it’s due to rise again in April and bills are estimated to increase by over 50%. The average bill will rise from £1277 a year to £1971. Of course, not everyone is average and for some the increase will be much higher. We estimate that by April 6.5 million UK households will be in fuel poverty – that’s one in four. Our summary of the crisis is here: www.nea.org.uk/energy-crisis.

“To mitigate some of the rise the government are planning two measures. If you live in a house in council tax bands A to D you will get £150 in April. Also, all households will receive £200 off their bill from October – but there is a catch. This has to be repaid at the rate of £40 a year over the next five years.

“We’ve been very vocal, telling the government these measures are ‘woefully inadequate’, particularly for those who are in fuel poverty and vulnerable.

“We know with bills rising so high it’s a scary time, so we have Sarah, one of our energy advisers, to answer your questions. We also have Matt, head of policy who can answer questions around the response to the crisis."

@LizzieMacQueen

My energy provider has sent me an bill based on estimated readings. At least 25% too high. Should i just pay this as it means I'm buying my energy in advance, at lower prices?

They'll no doubt do the same over estimating on March's bill so I may build up a bit of credit.

Or do you think they'll ask us to take a reading on 31/3/2022?

Hi @LizzieMacQueen

If you can afford to build up a bit of credit then it will give you a buffer but estimated readings are rarely good. The best tip I can offer is to give regular readings each month to your supplier. This will ensure you are not paying too little or too much on your bills for long periods of time.

Energy companies always estimate your use annually to decide what level of monthly payments may be required to cover your bills throughout the year (because you use more energy in the winter to heat your home than the summer) or suggest a cheaper tariff. They cannot know exactly what you are going to use of course. If you use less than estimated you will get into credit and can ask for your payments to be reduced and vice versa. They will estimate bills annually from now on, including the price cap increases, for the standard variable tariffs it applies to.

Please see our energy saving tips to help you reduce your consumption further if possible and keep costs as low as possible.

@illyawasthebest

My main question is, what on earth can we do?

Hi *@illyawasthebest*

It may feel like there is not much that can be done to combat the current energy crisis, at National Energy Action we tailor advice to each individual household so if you’re struggling it's worth getting an appointment with us. There is often something that we can do to make things a little easier or affordable for people who are really struggling or just reassure them they are doing all they can.

We are also campaigning at National Energy Action for people living in fuel poverty. Understanding what issues and hardship customers face helps us to relay that information to our policy team and informs our action points.

@frizzyandfrazzled @illyawasthebest in terms of what you can do to reduce your energy costs, you can see our advice leaflets.

If you are keen to help fuel poor households, then head over to our website where you will find a template letter to send to your MP, requesting their support in asking the Government to take greater action to help those with the lowest incomes. If you choose to do this, try and personalise the text a bit as it is more likely to be read by your MP if it does not match a template.

@cakeorwine

Do you think people should switch to paying as the bill comes in or should they take a rough estimate each month?

Energy companies have been known to over estimate energy use.

Hi @cakeorwine

Energy companies have been known to overestimate energy use.

Paying on receipt of bill is a payment method similar to prepayment meters where you will only ever pay for what you use, as long as you have given regular meter readings to your supplier or you have smart meters doing this work for you. This may be better for people who can afford to pay more in winter and less in summer.

But if you want to pay this way, be warned as tariff options are limited. You could end up worse off too as prepayment meters are up to 20% more expensive than paying by direct debit. You could also end up paying up to £130 additional admin charges to receive paper bills.

@Paranoidandroidmarvin

My question is. If they are making so much profit. Why are they hiking up the bills. Unless I’m missing something. I really don’t understand

Hi @Paranoidandroidmarvin @oakleaffy

This is because it is the companies that are finding and extracting the gas that are making the big profits, not your energy supplier (which in all likelihood will be making modest profits at best). The gas producers are able to sell the gas at a high price, which your energy supplier has to pay. The supplier then passes these costs on to you. National Energy Action has said that if the Government cannot afford to provide extra help to low-income households with the current Treasury budget, there is a good case for a windfall tax on gas production companies in order to fund help for those that need it most.

My current supplier contract ends on the 1st April. Based on their estimate renewing my contract will see my current monthly payment go from £40pcm to £117pcm 🥴 this is on a fixed rate. The variable rate is estimated at £74 pcm. I'm hearing that it's best not to change suppliers which option do I choose! Double and gamble it doesn't get worse or treble and not feed the family for a week. This is just for electricity as we have an oil tank to fuel the heating and hot water.

@JesusMaryAndJosephAndTheWeeDon

What about all electric properties?

All electric properties are often forgotten in both schemes for help and advice yet are typically paying more for their heating and hot water.

Not only is electricity more expensive than gas we don't have access to the full range of tariffs as E7 or E10 is often necessary run storage heaters. These tariffs should be being encouraged by energy companies so that they can increase usage when supply is high and demand is low but instead all electric customers are forgotten, often left with just the standard variable rate and no option to fix.

Customers with storage heaters and immersion heaters are more likely to be in rented accommodation, on low incomes and have pre-pay meters all of which compound the problems.

Customers with storage heaters are already coping with much colder homes and can't make savings by "turning the thermostat down" many were struggling to avoid mould and condensation before this price rise.

What help is available? I am reluctant to invest in newer more high tech storage heaters if time of use tariffs continue to be more difficult to get hold of and more expensive, but equally don't want to rely upon expensive plug in heaters.

Hi @JesusMaryAndJosephAndTheWeeDon

We haven’t yet been able to find out how the price cap will affect Economy 7 customers. I have been looking personally as well as for the people I help, as it will affect me too.

Economy 7 tariffs favour those with storage heaters as it means you can access cheaper rate at night. This heat is then stored in the heaters and released during the day.

We do know the price cap rise won’t just affect gas prices, it will affect electricity too. We also think that time of use tariffs may become more prevalent, not less, because smart meters are becoming more popular.

Storage heaters don’t have to be more expensive. It really depends on the person using them and their home. If you’re a low user then, yes, you are using them five or six months a year for your heating but for the rest of the year your bills could be quite low – especially if you’ve got an electric shower and don’t use the immersion heater. And especially if your home is well insulated.

You can boil a kettle for hot water, use the hob, microwave or slow cooker rather than the oven to keep your bills lower. You can find other ways to reduce your energy consumption.

@cakeorwine

One thing people aren't thinking of is that gas usage is generally higher in the winter months. So the new price cap will only last till October. Then when it changes in October, it may well be higher than April to October just at a time when gas usage increases massively.

Hi @cakeorwine

Yes, this is true. The industry expects prices to remain high throughout next winter, and prices could be even higher at that point. We believe that the Government must do more to help low-income households with their energy bills before next winter. If you agree, and are keen to help fuel poor households, then head over to our website where you will find a template letter to send to your MP, requesting their support in asking the Government to take greater action to help those with the lowest incomes. As I mentioned above, if you choose to do this, try and personalise the text a bit as it is more likely to be read by your MP if it does not match a template.

HI @ceecee32

This is one of the questions we get asked the most right now. It's hard to answer this without a little more information. It's important to find out how much the actual tariff is, rather than what the energy supplier wants the direct debit to be.

A direct debit might be higher or lower than the actual cost of your mum’s energy use per month.

The tariff is the unit costs of gas and electricity, as well as the standing charge for the fixed tariff. It could be higher than the supplier's variable tariff and/or the upcoming cap. If that is the case then fixing probably isn't the best option at this stage. At the moment there are virtually no deals that are cheaper than the price cap and even when prices increase in April that is generally still the case so we wouldn’t usually recommend fixing at the moment.

It does means your mum’s bills will go up but it should still be cheaper than fixing as you would have needed to fix before the last price rises in the summer of 2021 to make a saving. Hopefully after April the picture will be clearer and there will be some better deals on the market.

In the meantime, we advise you ensure your mum's meter readings are sent to the energy supplier at the same time each month to ensure they don't base any direct debits on estimated bills.

@FourTeaFallOut

I have a couple of questions. How many people will be drawn into fuel poverty by next October, assuming the cap increases a further 20%, as predicted? Do you think there is enough discussion in the media about how these increases go beyond an economic crisis and also represent a public health concern for next winter when whole swathes of those who are vulnerable may be too afraid to turn on the heating? What do you think is the best way to help those most at risk?

Hi @FourTeaFallOut

Our modelling suggests that a further 20% increase in prices in October 2022, would result in 800,000 additional households being brought into fuel poverty. That’s a huge increase. Our numbers suggested that before last October’s price cap rise 4 million UK households were in fuel poverty. This will rise to around 6.5 million in April, according to our research. It could mean in a year the increase will be 3.3 million UK households – a total of 7.3 million. Almost double. At the moment, there is not enough discussion on the impact this will have on households – National Energy Action will be working with the media and others to ensure this becomes a central part of the discussion.

Hi @Billandben444

We think the support the government is offering to help with the energy crisis is, in the words of our CEO Adam Scorer, ‘woefully inadequate’.

The government is offering two measures to most people, as some users here have mentioned. There is the £150 council tax rebate for those in properties A to D. Find your band here. They are also offering a £200 rebate on bills, which will have to be paid back across five years at the rate of £40 a year per household. At the moment, it looks as though if your child leaves home both you and they will have to pay back £200 each via your bills.

We at National Energy Action don’t think that the support is targeted enough for those on low incomes.

There is existing support that is still available. All pensioners should automatically receive the Winter Fuel Allowance. The eligible dates of birth change each year. Check this year’s here.

There is also the Warm Home Discount. The eligibility criteria is different for each supplier so contact yours to find out if you are entitled to it. Not all suppliers say it is for those on a low income. Warm Home Discount isn’t automatic. You have to apply. Watch out for application deadlines. Some companies open their applications in the summer, others later. Some do so for a very short window, others give you longer to apply. Not everyone who is eligible will receive it.

Your local council also has a fund available until the end of March called the Household Support Fund. This can help people on low incomes who are struggling, including struggling with energy bills or food. Search the local authority in your area and "household support fund". If you can’t find it then phone your benefits team if you have one.

One other thing to note with the new council tax rebate is that many of the most vulnerable households are exempt from paying council tax. There should be a discretionary fund available to help them. We don’t yet know how this will be accessed but if this applies to you it would be worth contacting your local council or benefits team if you have one.

@bellabasset

DAILY STANDING CHARGE: *@svara* Energy companies were privatised in the 1980"s. Nearly 30 of these companies have failed. If you accept the kw charges for gas and electricity have increased what is the reason the standing charge has increased so much? Is it anything to do with a shortfall for the levy those companies should have paid to guarantee customer's advance payments for energy? If so is it legal for all consumers to fund mismanaged private companies going bankrupt? WARM HOME DISCOUNT: This is being increased by £10 and the people eligible to claim this being widened. How will this be if help to those who are currently eligible as they will only be £10 better off? RATES REDUCTION:Again how will this work for people who pay discounted rates, will it be deducted after their usual discounts are calculated. Some people ie students or those who don't pay rates won't benefit.

Has Sunak really addressed helping those on lower incomes, or those whose rents have increased due to having had to move? I think he's increasing benefits by around 3%, so how does that work with an increase of 54% on energy?

National Energy Action does not believe that the Chancellor has addressed this issue. In the words of National Energy Action’s Chief Executive, Adam Scorer: “These energy crisis measures are woefully inadequate and will leave those on the lowest incomes and in the least efficient homes in deep peril.

“Government had an exam question: How to protect the most vulnerable from a devastating rise in the cost of energy? While their plans are not without merit, they fail this test by turning away from targeted measures to help the poorest energy consumers.

“We needed deep, targeted support for the most vulnerable. We have shallow, broad measures for all. That simply does not work.

“The depth of support is not proportionate to the increases. A household paying by prepayment will still have a £500 increase when you take into account rises from October 2021 and April 2022. The rebates on Bills and Council tax are not sufficiently targeted, too small and too complex.

“We expect the government will have no choice but to return to the issue of spiralling fuel poverty and another price rise later this year. By then they’ll be playing catch-up and great harm will already have been done. We need a more coherent plan we are going to ensure the poorest can stay warm this winter and next.”

Thanks, we're actually E10 customers (formerly Heatwise).

Although this makes it a little easier to keep the house warm and to keep energy costs down it makes it very difficult to access competitive tariffs or switch provider which leaves locked into variable tariffs with the legacy providers.

This is an issue that needs to be recognised and improved upon but we are generally forgotten.

We're already doing everything you suggest, plus timing showers, washing and use of the immersion within our off peak times.

@Monstermunch67

We have pay as you go card meters for both gas and electric. We've been asking to switch to smart meters for a couple of years, but they always say in the future, not yet. We're with British Gas and EDF. Are we going to be charged more than those who pay by direct debit? If so, is there any way to force the companies to hurry up with the smart meter installation? I am disabled and registered with them as vulnerable, due to chronic pain conditions, not sure if that would help my cause or not.

Hi @Monstermunch67

During covid there was a capacity issue with production and with installers being able to come out so that might be one reason for the delay. The other reason could be because you have two suppliers.

This can stop the smart meters from working. The reason is that the electric smart meter gives the signal to the gas smart meter so they have to come from the same supplier. It might be worth finding out which of the two companies you are with will install a smart meter, and which offers the best tariff, and then switching so you have just one supplier.

At National Energy Action we think smart meters make a huge difference to people’s lives. If you’re on a prepayment meter then you don’t have to go out to a shop to top up. This was really crucial for the vulnerable households we work with during the pandemic.

If you pay by direct debit, a smart meter means you don’t have to read your meter. It’s a job that can be difficult if your meter is in an awkward place and it can be easy to forget to do it regularly.

Having a smart meter means you don’t get estimated bills so you’re less likely to get into debt without realising and it means you’re more in charge of your energy.

@JesusMaryAndJosephAndTheWeeDon

Thanks, we're actually E10 customers (formerly Heatwise).

Although this makes it a little easier to keep the house warm and to keep energy costs down it makes it very difficult to access competitive tariffs or switch provider which leaves locked into variable tariffs with the legacy providers.

This is an issue that needs to be recognised and improved upon but we are generally forgotten.

We're already doing everything you suggest, plus timing showers, washing and use of the immersion within our off peak times.

@JesusMaryAndJosephAndTheWeeDon it sounds like you're doing everything right and we're sorry you're in this situation. We agree that E10 and E7 customers have been forgotten. We believe smart meters could solve this issues in the future but there is still a long way to go.

@HirplesWithHaggis

It is my understanding that the price increases are due to global gas prices shooting up, and we use gas to make electricity. However, I am in Scotland and with a company that supplies only renewable energy - so from wind - so why am I effected?

Hi @Cakeorwine @HirplesWithHaggis @Oddbutnotodd

Yes, you are correct that the price increases are largely due to the global gas price. Unfortunately, the way in which the power market works is that each generator gets paid roughly the same amount of money per unit produced at any particular time, and this is set by the highest cost generator running. That means that if the gas price is high, the price of all generators is set by that high gas price, regardless of the fuel they use. Of course, if your supplier has its own contract with wind farms, this can be avoided. But it seems likely they buy it from the wholesale market.

@billybear

we moved house end last year with shell energy, had new smart meters put in 1st feb,still not working with our new smart meters shell keep sayingbe patient,its terrible not knowing what we are using, a much newer warmer house than last house we just moved from,spoke to shell today had to sent a photo of our smart readers saying not working yet,fed up

Hi @billybear

Do you mean in home display isn’t working or the meter itself?
It takes about two weeks for smart meters to start “talking” to the network.

It has taken a bit longer for you but it doesn’t mean the meter isn’t working, it just doesn’t “talk” to energy supplier straight away. Check the meter itself is counting the units you are using (not the in home display).

But if it’s still like this in a couple of days, there might be a signal issue in your area so it could be worth getting Shell to check.

[quote bellabasset]@Svara - I heard one of the CEO's of either Centrica or Octopus saying the the other week that the failures of the so many energy companies would cost each customer £200. Earlier this year there was concern about the companies who weren't paying their levies or not being able to repay customers who'd overpaid. I think we need to know how the levy scheme works.[/quote]
Hi @bellabasset @Svara @Oddbutnotodd @MintMocha

In the last months, lots of energy suppliers have gone under. In these cases, their customers are transferred to a new supplier. Some of these customers will have credit on their account that cannot be honoured by their failed supplier (as it is essentially bankrupt). Their new supplier must ensure that their credit balance is maintained.

Additionally, many of the customers with failed suppliers will have been on the lowest price deals. Their new supplier has an obligation to maintain their tariff terms and conditions, which could have a significant cost if the energy market is priced above their good deal.

So this can lead to significant extra costs. The rescuing suppliers do not have to fund this themselves (if they did, nobody would take the customers on), and the regulator (Ofgem) decided that this should be ‘mutualised’ - meaning that each domestic customer covers a share of the costs. Usually this is a small cost because relatively few suppliers go out of business each year. Because so many have failed in the last year (over 25), we have a big cost to everyone which, according to Citizens Advice is in the region of £100 over a 15 month period.

@drybird

My current supplier contract ends on the 1st April. Based on their estimate renewing my contract will see my current monthly payment go from £40pcm to £117pcm 🥴 this is on a fixed rate. The variable rate is estimated at £74 pcm. I'm hearing that it's best not to change suppliers which option do I choose! Double and gamble it doesn't get worse or treble and not feed the family for a week. This is just for electricity as we have an oil tank to fuel the heating and hot water.

Hi @drybird

As we said to @ceecee32 it’s a really tricky time to fix at the moment because there are so few deals available and it’s virtually impossible to find one that’s cheaper than the price cap. It’s also all about unit cost and standing charge rather than the amount they want to make your direct debit.

As you are low electricity users, because you have oil, my usual advice is not to fix (but it really does depend on your circumstances).

It’s going to be so difficult when prices rise. Hopefully after the April price cap rise there will be more choice of tariffs available to you.

@MintMocha

How soon is the government going to make sure that distributed heat networks like found in new builds - which we were told were required and much more eco-friendly - be covered by the price cap? We have no choice over supplier as we are not billed for gas directly, but for the hot water that the system produces to heat our homes, and the company seems to be able to charge whatever they like for this. I know that there is a promise that it will be brought under ofgem and regulated but no sign of when - could be several years? Why is there no actual plan for this?

Hi @MintMocha

As fair as National Energy Action is aware, there are currently no plans for an equivalent price cap for district heating networks, even when they will be regulated by Ofgem. National Energy Action has been pushing for heat network customers (and those that use other forms of heating – including oil and LPG) to receive the same level of consumer protections as gas and electricity customers. There has not yet been a commitment but we will keep on advocating for this.

Thank you

I agree that smart meters should have helped E7 and E10 customers but they have been forgotten.

It is especially frustrating as one of the touted benefits of smart meters was time of use tariffs to even out demand. E7 and E10 customers are already doing this but really aren't getting the price advantage to reflect this as these tariffs aren't seen as "fashionable" while all the energy companies are just competing to offer the lowest headline price to standard single rate customers

[quote HelenaHandcart0]**@bellabasset Thanks for posting the new unit charges.
I don’t know why they don’t just use the kWh unit prices for the caps instead of a fictionalised annual bill![/quote]
Hi @HelenaHandcart0

We agree that it is very complicated to work out. I've seen that you've already been helped by @bellabasset who has pointed you in the same direction as I would have. I hope you get to the answer!

On your website you have social tariffs as a suggestion. Is there a risk that the costs of something like this could be passed on to those who just miss out on qualifying? I ask as a single parent working full time on a low income but I don't qualify as 'low income'.

@Fedupbuyer

Will they stop reporting to credit reference agencies because a lot of people are going to miss payments through no fault of their own.

Hi @Fedupbuyer

Sadly, energy companies won’t stop reporting so we advise people to get ahead of that. The best thing is that before your debt builds too high is to get in touch with energy company.

The other option is to go to an accredited money advice service like money advice service so you can get a statement of affairs with all your incomings and outgoings. This will help as you can go to your energy company and show exactly how much you can afford.

It can also be worth implementing as many energy efficiency measures as possible. We have some tips here. We don’t usually advise people switch suppliers at the moment as the price cap means the best deals are no longer available. We are also really cautious about advising people to turn their thermostat down as some of the people we talk to are already at the very limits of what they can cope with or even self-disconnecting and this can have big impacts on health. Usually comfortable room temperatures are around 16-21 degrees C.

Hi @suitcaseofwhine

As we said to @Fedupbuyer energy companies won't stop referring to credit reference agencies so you will end up in debt and a debt collection agency will chase you for for money.

That's why it's important to get ahead, arrange a payment plan and not let the debt spiral. We think the best course of action is advocating for change - protecting the most vulnerable people.
We also think that, like with water bills, there should be a social tariff for those who needs it most.

@Svara

On your website you have social tariffs as a suggestion. Is there a risk that the costs of something like this could be passed on to those who just miss out on qualifying? I ask as a single parent working full time on a low income but I don't qualify as 'low income'.

Hi @Svara

Thanks for visiting our website and taking a look. We believe there are opportunities to ensure that social tariffs are not paid for by other customers that don't qualify, for example through Treasury funding.

Additionally, we hope that the Government is becoming more aware of households that are falling through the gaps, by providing Local Authorities with discretionary funding to help households in their area.

We haven't worked through the exact details on how a social tariff will work, but a priority will be to ensure it doesn't make the situation worse for those who just miss out.