UK energy firms demand more government help for struggling households

Households in the UK need more financial assistance with their energy bills this winter, according to the industry body Energy UK. The organization argues that persistently high energy prices have left many consumers requiring "emergency support" beyond the existing £150 Warm Home Discount.

Energy UK chief executive Dhara Vyas stated that bills are unaffordable for millions and a "better targeted and more agile" support scheme is necessary. She noted that suppliers are doing all they can, but record levels of customer debt indicate the current system is failing those in need. Vyas proposed a new "social discount" scheme, suggesting it would create a system that "works better for everyone."

The call for more support comes as the energy regulator Ofgem prepares to announce the price cap for October onwards, which is predicted to reach a three-year high. At the end of last winter, Ofgem reported that customers owed suppliers a record £4.7 billion. Wholesale energy prices have since risen, influenced by the conflict in Iran and heatwaves across Europe that increased demand for power generation.

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Suppliers continue to do all they can to help their customers but as well as persistently high bills, record levels of debt show how the current system is failing to provide the right support to those in need.

Energy consultancy Cornwall Insight forecasts a 4% rise in the Ofgem price cap, impacting household bills in the first half of winter. This increase is expected to negate the effect of the Prime Minister's decision to remove VAT from household electricity bills starting in October.

Currently, the Warm Home Discount provides a one-off £150 rebate to those on means-tested benefits, administered by energy suppliers. Energy UK estimates this scheme reaches six million customers, but an additional 2.5 million require help due to medical conditions or poorly insulated homes that increase energy consumption. The body suggests that combining data on income, health, and energy use could enable a targeted and adjustable discount scheme, potentially costing £1.9 billion and offering up to £450 to some households.

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a system that works better for everyone