A third of working families struggling to pay energy bills despite three-year price freeze, uSwitch finds
Almost 4m households, or one in three working families, are already struggling to pay their energy bills this winter despite there being no major price hikes for three years, according to new research.
Half of working families are planning to cut their energy use this winter so they can afford their bills, energy price comparison website uSwitch found, even though two-thirds are worried that cutting consumption will affect their family’s health.
To help customers access the most competitive tariffs, remedies from the Competition and Markets Authority’s (CMA) energy market investigation, published in June, should be implemented as soon as possible, uSwitch urged.
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Among its findings, the CMA revealed customers are paying £1.4bn more than they would be in a fully competitive market. It issued 30 new proposals to rectify the market, including strengthening regulator Ofgem’s powers and ordering energy suppliers to hand over the details of customers who have been on a default tariff for more than three years to Ofgem.
The government should also consider extending the Warm Home Discount scheme, uSwitch urged. The discount provides financial support to vulnerable customers but is not yet available through smaller energy providers.
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“Ofgem is working to implement the CMA’s remedies as quickly and effectively as possible as part of our wider reforms to deliver a fairer, more competitive and smarter energy market,” Ofgem said in a statement.
“We want suppliers to engage more actively with customers, particularly those on standard variable tariffs, to help them get a better deal. The large suppliers have already seen their market share fall from 99 per cent to less than 85 per cent in four years.”
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The research also found that 37 per cent of families were unaware of schemes that offer support to those in financial difficulty.
“It’s appalling that even families in work are struggling to pay their energy bills – and we haven’t even seen any major price hikes for nearly three years,” said Claire Osborne, energy expert at uSwitch.
“The biggest worry is that, with signs that prices are on the up, many more families could feel forced to keep the heating down in what’s set to be a very cold winter.”
A department for business, energy and industrial strategy spokesperson said: "This government is on the side of energy customers and providing vital support for people in our community who need it most.
"We continue to support the Warm Home Discount scheme, which helped over 2m customers get £140 off their energy bills last winter, and are re-focusing the Energy Company Obligation so it effectively tackles the cause of fuel poverty."
Last week, Greg Clark used his first major speech as head of the newly created business and industrial strategy department to attack utility companies for complicated tariff regimes which confuse people into paying too much.