Energy consumers face unprecedented challenges this winter

This may be a winter unlike any we’ve seen before — it’s vital the right support and protections are in place

It’s that familiar time of year again —the clocks are about to change, the weather is getting colder. The heating goes on and our energy use goes up. But, this winter, the coronavirus pandemic means energy consumers are facing some new and unprecedented challenges.

Here, at Citizens Advice, we’ve identified 3 major risks as we head into the winter months:

1. Many people are struggling financially. Our research shows that 2.8 million people are behind on their energy bills due to coronavirus. Those worst hit include people who’ve been directly affected by coronavirus and key workers. 1.9 million additional households were on Universal Credit by August. And, as coronavirus restrictions increase and affect people’s ability to work, many household incomes will be reduced.
2. As people are forced to spend more time at home during the pandemic, their energy usage will be higher than it normally is. If we have a cold winter, this impact could be particularly severe. We know that if people are unable to top up their energy or reduce their usage for fear of high bills, they face negative impacts to their physical and mental health.
3. Energy companies are also facing financial pressures and adapting their services. Many are reducing the size of their call centres and moving to more digital contact channels to cut costs. Some of the largest suppliers are also going through takeovers affecting millions of customers. Changes like these have historically caused problems for some customers, and sometimes made it harder to get in touch with their supplier for the support they’re entitled to.

These problems will be particularly difficult for some people in vulnerable situations. For example, people who prepay for their energy can be disconnected if they can’t afford to top up or get to the shop if they’re self-isolating, while people who struggle to use the internet are more reliant on accessing support through telephone services.

Energy suppliers need to play their part this winter

Early in the pandemic, energy companies agreed to put in place additional support for customers affected by coronavirus. This included payment holidays and lower direct debit payments, dependent on individual circumstances.

This support is better than many other sectors and should remain in place. Our research has shown that people often don’t expect support from their energy company, so suppliers should do more to ensure that their customers are aware they can get help if they need it.

Suppliers will also need to follow strong new Ofgem rules, announced this week, that require them to help people set up sustainable repayment plans for debts, and give more support to households who can’t top up their prepay meters.

To get the help they need, customers need to be able to quickly and easily get in touch to ask for it. So, as companies make changes to the way they operate their services, they need to put the needs of customers in vulnerable circumstances at the heart of their plans.

Government needs to act to support customers

Many people now receive some sort of government support for their income, whether through welfare payments like Universal Credit, the new Job Support Scheme or support for people unable to work due to coronavirus restrictions. In all these, the government needs to set the right level of support so that people can afford to pay for their essential services.

However, some people will still need extra help. People with higher energy needs, for example if they have children or a health condition, might need extra help. People who owe large amounts may be unable to repay what they owe, and more support from their supplier that they have to repay won’t be a long term solution. For these people, the new Ofgem rules and supplier voluntary support won’t be enough.

Government schemes do exist for people who are on very low incomes and vulnerable. The Warm Home Discount gives working age people who qualify £140 off their bill and also provides some funding for debt write offs. However, this support is given on a first come, first served basis. NEA estimate that 2 million people already missed out before coronavirus, so the funding available will not meet increased demand this winter.

Government should act now to ensure that people who need extra support get the help they need. For example, it could top up the existing Warm Home Discount scheme and target this support at people who are at highest risk of being unable to pay for energy this winter. It could also make Cold Weather Payments, which top up benefits during very cold weather, more generous to mitigate the risks to people’s health.

Without support more people will go into crisis

Without preventative support, more energy consumers will end up in a crisis situation — unable to afford to top up their meter or pay their bill. This will put more pressure on emergency support funds provided by councils and charities.

There have been some steps to increase this type of support — like Ofgem’s redress funding making £10m available for prepay customers in financial emergencies. But these can only ever be sticking plaster solutions that will leave some people stuck in cold, dark homes while they wait for help.

We’ll be monitoring the contacts we receive from people closely to make sure suppliers are offering the right support, and we’ll expect Ofgem to take swift action if people are put at risk. But without more government support, more people face a cold, dark winter.