Customers to be warned of energy bill rises from April
- Published
Energy firms will begin writing to customers within days to warn them of bill increases from the start of April.
Firms have to give customers reasonable notice of price rises or changes that will leave them worse off, according to Citizens Advice, external.
Typical household energy bills are set to rise to £3,000 per year next month.
The BBC understands the government is reviewing the level of energy support it gives households amid warnings many more could face difficulties.
It comes after Energy Secretary Grant Shapps said he was "very sympathetic" to the idea that the government should stop the rise in annual energy bills.
At the moment, the government is limiting the typical household bill to £2,500 a year, plus a £400 winter discount, which will also end from April.
But from 1 April the help will be scaled back pushing bills up.
Energy UK, which represents suppliers, said firms would be writing to customers to let them know how much their bills were going up within the next few days.
It said suppliers could offer support to customers struggling to pay their bills, but there was a "limit" to what they could do.
A Budget U-turn?
Fuel poverty campaigners say the number of households struggling to afford their bills could rise from 6.7 million to 8.4 million as a result of the April rise.
So far Chancellor Jeremy Hunt has declined to extend the support, but experts increasingly think he will change course, probably at this month's Spring Budget on 15 March.
The Institute for Fiscal Studies (IFS) think tank said the Treasury could afford to keep support at current levels until the summer as wholesale energy prices had fallen sharply, cutting the cost of the scheme.
Most analysts also believe energy bills will fall below £2,500 a year by July, meaning the government would only have to provide support at current levels until then.
Others including the Resolution Foundation think tank and the consumer rights campaigner Martin Lewis think Mr Hunt is highly likely to cancel the rise in bills.
Energy UK urged the government to hold the level of support at £2,500 for an average household, "and to announce that quickly so it can be incorporated in customer bills in time for April".
The Treasury declined to comment.
Jeremy Hunt told me a fortnight ago that the help on energy bills was "under review". The Treasury is privately pointing to that interview now.
It is looking a lot like some extra support, but as the chancellor also pointed out to me, he doubts he has the room for a major new initiative. However, postponing that reduction in energy support by a few months to a point when it is no longer relevant, would not be a new initiative.
Some energy suppliers have already begun a wave of emails warning of the rise, and, crucially, pinning the rise on decisions of the government. For example British Gas wrote to customers saying "because of the changes the government is making to the energy price guarantee, the amount you pay for your energy is due to change this April".
Campaigners are also calling it the "government's energy price rise", and asking for postponement of the increase to the energy price guarantee from April to the summer.
Because of falls in the wholesale energy price this will wipe out the rise, result in inflation falling more rapidly, and help limit the UK's economic downturn. But it will definitely cost a few billion and could leave the Treasury exposed to tens of billions more if there is any unexpected renewed hike in global gas prices.
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- Published28 February 2023
- Published27 February 2023
