Energy bills are expected to jump over the coming months as a supplier crisis emerged and the price cap was recently raised. Fortunately, the Warm Home Discount Scheme opens on October 18, 2021 and eligible claimants will get £140 off their energy bills throughout the winter.
The broader group
People may also qualify for the scheme if they do not receive Pension Credit but are instead on a low income, get certain means-tested benefits and are the customer of an energy provider taking part in the scheme. To be eligible under this criteria, claimants will need to stay with their supplier until the discount is applied.
Electricity suppliers themselves will have discretion over who can get the discount under these rules. The number of discounts suppliers can give is also limited, meaning claimants will need to contact their suppliers as early as possible to see if they’re eligible and how to apply.
This should be done even where claimants were eligible in previous years.
A full list of participating suppliers will be put on the Government’s website but many well known names have participated over the years. This includes British Gas, E.ON and EDF Energy.
Energy companies go bust
In recent weeks, many smaller energy firms have gone bust in the face of difficult economic conditions, with many experts warning further closures could be on the horizon. Unfortunately, according to analysis from Citizens Advice, as people are moved to a new company when their suppliers close, they’re likely to pay ££6.70 more every week (nearly £30-a-month) for their energy.
The charity warned people in receipt of the Warm Home Discount and Universal Credit stand to lose even more than this. Citizens Advice analysed deals offered by the five largest failed suppliers to date, against the price increase customers typically experience when moved onto a default tariff at another supplier. Its results showed:
- Customers whose supplier goes bust and who are moved onto a default tariff with another supplier will be £6.70 a week worse off
- Customers moved to a new supplier who lose their Warm Home Discount, and face higher living costs due to inflation will be £17.40 a week worse off
- Customers moved to a new supplier who lose their Warm Home Discount, face higher living costs due to inflation, and see their Universal Credit cut will be £37.40 a week worse off
To illustrate how difficult this will be for affected Britons, Citizens Advice shared insight from one of their worried customers. Shaun, a single dad from Northumberland and has a son in primary school is worried about how he’ll pay his bills this winter.
“I’m terrified thinking about how I’m going to cope this winter,” he said.
“If my Universal Credit is cut and bills go up, I just won’t have the extra to pay for any increase on my gas and electric. It’s starting to get colder and I’ll need the heating on for my son. I’ll just have to wrap up when he’s at school, so I can put it on when he gets home. Even then I’ll only be able to have it on for a couple of hours, not the whole evening.”
Dame Clare Moriarty, Chief Executive of Citizens Advice, concluded by urging the Government to take action.
“Overnight price hikes will be a shock for more than a million households whose energy companies have gone bust,” she said.
“We’re particularly worried about those who’ll face desperate choices this winter because of the cumulative impact of soaring bills, the planned cut to Universal Credit and inflation.
“The Government and Ofgem must guarantee that the Warm Home Discount will be continued for people moving to new energy suppliers. People on the lowest incomes should be able to access emergency winter grants so they can stay warm in the cold months ahead.”