Energy price cap rise will be ‘heavy blow’ to households already hit by COVID

citizens adviceAPRIL will be an extremely hard month for many families as energy prices are set to rise just as Universal Credit income is likely to fall.

On February 5 Ofgem announced that the Energy Price Cap would rise on April 1 2021.

The Energy Price Cap will increase by £96 for default tariff customers, and by £87 for pre-payment meter customers. The regulator says this is due to a rise in wholesale energy prices.

Ofgem has also allowed suppliers to claim £23 for bad debts to cover the number of customers being unable to pay their energy bills due to the impact of COVID-19.

At the same time the £20 Universal Credit uplift is due to finish at the beginning of April.

The £20 uplift was established in April 2020 in response to the unprecedented hardships caused by the COVID-19 pandemic. It provides Universal Credit (and Working Tax Credit) claimants with an extra £20 a week, £1,040 a year, to help with necessary living costs.

The scheme has been a vital lifeline in keeping people financially secure during this difficult time.

In West Dorset the number of people claiming Universal Credit since the beginning of the pandemic has more than doubled from 3,084 to 6,259.

Bridport & District Citizens Advice has supported 687 clients with Universal Credit since March 1st 2020 and 81 per cent of the clients helped with benefits issues have never come to Citizens Advice before.

Alistair Cromwell, acting chief executive of Citizens Advice, responded to Ofgem’s latest update to the Energy Price Cap combined with the Universal Credit situation by saying: “This increase will be a heavy blow to a lot of households. For many people on Universal Credit it will come at the same time as the £20 a week increase to the benefit is set to end.

“With a tough jobs market and essential bills rising, now is not the time for the government to cut this vital lifeline.”

Citizens Advice research in December showed that 2.1million households were behind on their energy bills, 600,000 more than in February 2020.

The charity’s research also showed a quarter of all energy customers worry they won’t be able to pay their bill this winter.The concern now is that these price rises will push even more families into debt.

Citizens Advice Bridport & District can help people reduce their energy bills and save money by sharing information to help clients take three simple steps:

  1. Checking to see if they are eligible for discounts, grants and support
  2. Switching their tariff or energy supplier to get the best deal
  3. Saving money by becoming more energy efficient

For complex or urgent cases, or if a person is in a vulnerable situation, they may then be referred onto dedicated Citizens Advice in Dorset energy projects.

Citizens Advice Keep the Lifeline campaign aims to extend the £20 benefits uplift beyond its end date of April 2021 so that millions of families are not pulled into poverty.

Six million households rely on the extra £20 a week and Citizens Advice found that 75 per cent of people receiving Universal Credit will be unable to cover their costs when the uplift ends.

In addition, one in five Citizens Advice debt clients won’t be able to pay their bills without the £20 uplift.

During COVID restrictions, Bridport & District Citizens Advice offers comprehensive advice on energy, benefits, debt and other issues.

Telephone freephone 0800 144 8848 or send an email using the contact form on the website or leave a message on 01308-456594. You will be called back.

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