Average households could be paying out an extra £700 per year on energy. Image: Pexels
The number of people looking online for information on their energy bills has soared by more than 9,000 per cent in a week amid the gas price crisis, according to Citizens Advice.
Millions will be plunged into financial catastrophe through a “double whammy” of soaring gas prices and the universal credit cut, the experts warned, after online analysis revealed the number of people desperate for help.
Between September 11 and September 18, the charity recorded a 9,300 per cent increase – from 155 to 14,500 – in the number of people looking for information about who was taking over their energy supply.
This followed warnings that soaring wholesale gas costs – which have increased by 250 per cent since April due to depleted supplies, increasing demand and US refineries closed by extreme weather – are devastating the UK’s energy sector, pushing suppliers out of business and putting households at risk of going cold in the winter months.
The energy price cap means companies cannot pass the cost onto customers. But 15 million households face soaring fuel bills anyway after Ofgem announced it will increase the cap by 12 per cent on October 1.
Just five days later, the government will scrap the £20-per-week universal credit increase introduced at the start of the pandemic, cutting more than £1,000 from the annual incomes of nearly six million families.
“This is a hugely unsettling time for millions of energy customers,” said Dame Clare Moriarty, chief executive of Citizens Advice.
“It’s particularly worrying for many on the lowest incomes who’ll be facing the double whammy of rising fuel bills and a benefits cut.
“With choppy waters ahead, the single best thing the government can do is keep its lifeline of £20-a-week to universal credit.”
Nearly four million UK households are already behind on their energy bills, according to the End Fuel Poverty Coalition, and the price hike will push about 488,000 into hardship.
The energy cap rise would come “at the worst possible time for millions of households across the country”, a spokesperson for the organisation said.
It was “difficult to put into words just how devastating” the rise will be for struggling families, they added, warning low-income households on pre-pay meters would be most at risk of “facing the stark choice between heating and eating”.
The fuel bills increase will most affect those “hit hardest by the impacts of Covid and lockdown,” said William Baker from Solutions to Tackle Energy Poverty, urging the government to scrap the universal credit cut.
Energy company Bulb, which is the country’s sixth largest provider and has 1.7m customers, announced on Monday that it was seeking a government bailout to avoid going bust.
A handful of smaller energy suppliers have already folded, including Utility Point and People’s Energy. British Gas agreed to take on 350,000 customers from the latter.
Green, an energy provider with around 250,000 customers, announced it is facing administration and in talks with insolvency advisers.
The number of UK energy companies could dwindle from around 70 to just 10 by the end of the year if the gas price crisis does not improve, experts warned. But Business Secretary Kwasi Karteng said failing suppliers were unlikely to get government bailouts.
“I do not think it’s the right thing for taxpayers’ money to be injected into companies that have been badly run,” he said, but suggested the government could give loans to larger companies absorbing customers from suppliers which have folded.
But he insisted ministers would support vulnerable families facing fuel poverty, adding: “There is absolutely no question of the lights going out or people being unable to heat their homes.”
Urgent action is needed to prevent even more people being pushed into homelessness. A secure home is the first step in addressing the cruel cycle of poverty to ensure people can fulfil their potential. Join us to keep people in their homes.