Charity's energy bills warning over new fuel tariffs

Vulnerable people already struggling with household finances could be hit hard by changes to gas and electricity bills, a charity in Wales has warned.

Energy firms are introducing new tariffs supposed to make fuel costs clearer.

But it also means most bills will include a new standing charge, costing up to £400 a year.

The trade association representing the industry said firms would try to ensure customers were on the best tariff.

However Age Cymru said older people would still have to pay the new charge even if they did not use much fuel.

"Bills are a major part in an older person's expenditure. A lot of people turn down their heating in the winter because they worry they are not going to be able to afford it," said Graeme Francis, from Age Cymru.

"Standing charges may penalise people that don't use very much energy or those who spend time away from their property.

"If someone goes into hospital or a care home, this is potentially a real problem as they will have no way of controlling their bills. They will be paying an amount every month whether they use any energy or not."

According to the charity, a third of households in Wales were already in what is termed "fuel poverty" - where the average cost of fuel for an individual home is above the national average.

Age Cymru said this contributed to the deaths of 1,500 older people in Wales every winter.

The change to the way bills are calculated is part of reforms introduced by energy industry regulator Ofgem.

It has told energy firms to simplify pricing plans following criticism from consumer groups such as Which?.

Which? executive director Richard Lloyd said the current energy market was "bewildering" with "hundreds and hundreds of prices" making it hard for consumers to find the best deals.

Energy providers have been told to reduce the number of tariffs they offer to just eight - four for electricity and four for gas.

Most will include the fixed standing charge.

Age Cymru said it was calling on Ofgem to reassess its guidance to energy companies, and wants the fuel companies to be more sensitive to the needs of pensioners.

Provide support

"They should be more compassionate in terms of dealing with people who might be in vulnerable situations," said Mr Francis.

The trade association representing the industry, Energy UK, stressed that changes to tariffs had been designed by Ofgem, and that the fuel firms would do their best to ensure individuals were on the best tariff for them.

Its chief executive, Angela Knight, denied the standing charge would hit older people.

"Whether it's a standing charge or whether it's absorbed all into the bill itself, it's still the same thing," she said.

She said the industry already operated a Warm Home Discount scheme to provide support for vulnerable households.

The majority of the tariff changes will come into force in December though some firms are already taking action.

From Monday, E.ON is scrapping its Stay Warm scheme, offering fixed pricing for the over-60s.

It has blamed the Ofgem rules on the number of tariffs it operates as the reason, though Ofgem said it had been clear that suppliers were allowed to keep social tariffs.