Energy customers set for autumn crisis, Citizens Advice say

It also found five million customers will be unable to afford the price hikes coming into force on 1 April 2022, amounting to an average of £60 per month.

Citizens Advice is urging the Government do more to support struggling energy customers when the Spring Statement is delivered next week.

Choose research into the help offered by the Government so far found that 66% believe the support isn't enough to stop them cutting back on heating or other essentials.

Credit: Andrey_Popov/Shutterstock.com

Unaffordable

The research from Citizens Advice found one in four adults or 14.5 million people will be unable to afford the increase in their energy bills in October 2022.

It is projected to rise by around £145 per month, yet households are already warning they cannot afford those hikes.

More immediately, five million customers say they are unable to afford the price changes due to come into force in two weeks on 1 April 2022.

This will see bills rise by an average of £60 per month, yet millions say they can't afford to pay more and, of those, 41% say they have already borrowed to pay for essentials.

Citizens Advice wants the Government to announce fresh measures in the Spring Statement to support customers faced with unprecedented increases in their energy bills.

Key findings

There are three key findings highlighted by Citizens Advice in this latest research. They say:

1. The £200 energy rebate promised by the Government will not help, according to many customers. 83% said they did not think the energy loan would make a significant difference to their ability to pay their energy bills.
2. Customers on prepayment meters will be hardest hit by rising energy bills because they are less able to spread the cost of energy throughout the year and are at greater risk of being disconnected.
3. The number of customers seeking crisis support from Citizens Advice hit a new high in February 2022, with 24,000 people referred for support.

It reiterates the issues that campaigners and consumer groups have been highlighting for months, yet the Spring Statement is the last real opportunity to mitigate the worst of these effects for vulnerable customers.

Energy affordability

The energy price cap for April to September 2022 was set at an average of £1,971 per year, an increase of 54% compared to the previous cap period.

This is mainly due to the soaring wholesale gas prices that pushed dozens of energy providers into administration in 2021. However, the costs of these collapses are also factored into the price cap rise, with customers extra standing charges to pay down those debts.

Since standing charges are the amount households pay each day to be connected to the National Grid, these increases cannot be avoided and customers will be paying more to simply have their electricity connected before they use any of it.

Choose conducted our own research earlier this year and found that:

• 36% were already struggling to pay their energy bills even before the April 2022 price rises are implemented and 4% were already in arrears
• 28% of people were already cutting back on heating and other essentials and 38% will have to cut back despite the help on offer from the Government

In addition, our research found that 21% said the £200 energy loan would not be enough to help with their energy bills and they would struggle to repay it. A further 28% said it would help with their bills but repaying it may cause them difficulty in the future.