What to do about rising energy bills

The price rise has been caused by an increase in wholesale gas prices (the amount that energy firms pay), which have seen a steep rise since October 2021. Gas prices have hit a record high as the world emerges from lockdown as well time as other economic factors having an impact.

This means that changes in wholesale prices are passed on to households through rising energy bills.

If your fixed deal has come to an end or you’ve been moved to a new supplier, it’s tempting to look for a new energy company where you can make savings. Unfortunately, no fixed deals are being offered for less than the energy price cap at the moment, so you won’t cut your bills by switching.

The Energy Price Guarantee will be held at £2,500 until 31 March 2023. From April the Energy Price Guarantee will go up to £3,000 a year for a typical household until 31 March 2024.

There are a few government schemes you may be eligible for to help soften the impact of increased costs of living.

All domestic electricity customers will get £400 off their electricity bill from October 2022.  

If you pay your bills by Direct Debit or credit, the money will be credited to your account in six instalments, once a month from October 2022 to March 2023. 

If you have a smart pre-payment meter £66 or £67 credit will be added to your meter once a month for six months from October. 

If you have a traditional pre-payment meter, you’ll get one voucher or Special Action Message (SAM) a month for six months to use towards top-ups. The vouchers will be sent to you in the first week of the month using the contact details your energy company has on file. Make sure your email, phone number and address are up to date so you don’t miss out. Once you get your voucher, you can use them where you would normally top up, like at the Post Office or a shop with a PayPoint machine. 

You don’t need to apply for this, if you don’t have a pre-payment meter the discount will be added to your bill automatically and pre-payment customers will be sent their vouchers or SAMs without needing to ask for them. Please ignore any scam texts, calls or emails that tell you they need your bank details for the discount.

The government has confirmed (19 December 2022) a £600 payment will be made to people living in Northern Ireland in mid-January as part of the Energy Bills Support Scheme Northern Ireland (EBSS NI). This will be made up of the £400 EBSS NI payment and £200 of support under the Alternative Fuel Payment (AFP) scheme for using off grid fuel like Liquid Petroleum Gas (LPG) or heating oil. All households in Northern Ireland will receive the AFP payment, which will be managed by energy suppliers. If you haven’t been paid the £600 payment automatically you can apply for it on GOV.UKOpens in a new window

Customers who pay by Direct Debit will receive the £600 into their bank account directly. Other customers will be sent a voucher to redeem the £600 payment which they can redeem at a Post Office either as cash (subject to the Post Office having funds available) or by depositing it in a bank or credit union.

Voucher holders will need to take the voucher, the letter from your supplier issued with your voucher and proof of address to the Post Office to redeem it.  

Proof of address needs to be dated before 2 January 2023 to be valid. 

If depositing into your bank account, you will need to take your bank card or account information with you to the Post Office. If redeeming for cash, a photo ID will be required. 

Households who aren’t on the gas grid and use alternative fuels like liquid petroleum gas (LPG) or heating oil will be given an additional payment of £200, to compensate for the rising cost of fuel, by Direct Debit, credit or if, you have a smart pre-payment meter, the £200 payment will be credited by your electricity provider automatically.  

If you have a traditional pre-payment meter your energy company should send you a special action message (SAM) or voucher.

The government has also extended £400 worth of support to households who can’t access the Energy Bills Support Scheme payment from a domestic electricity supplier. You should qualify for this help if you don’t pay your electricity company directly, for example because you live in a park home, use off grid power or have community heating. 

The GOV.UK portalOpens in a new window is now open for households in England, Scotland and Wales to apply for the £400 payment, and there’s more information about who’s eligible on the site. If you’re in Northern Ireland and haven’t been sent any payments because you don’t pay a domestic electricity bill, you can apply for your £600 payment on GOV.UKOpens in a new window

If you’ve already been receiving the £66 or £67 a month payments towards your bills you won’t be able to claim. 

If you’re on a pre-payment meter the Energy Price Guarantee will be applied automatically by your supplier. There’s no need to apply and you won’t need any vouchers.  

If you’re on a fixed rate tariff the discount will be applied automatically by your supplier. Customers on fixed rate tariffs that are already below the Energy Price Guarantee will continue to enjoy those low rates.

If you pay for your energy as part of your rent your landlord should pass on the discount to you. You can share the link to the government’s factsheetOpens in a new window with your landlord if you think they haven’t passed on the discount from the Energy Price Guarantee or the £400 Energy Bills Support Scheme (EBSS) discount. 

The government has announced three Cost of Living Payments to be sent out across 2023/24 for people on means tested benefits, as well as extra payments for pensioners and people with disabilities. Like the previous Cost of Living Payments, these will go directly into your bank account and you shouldn’t need to apply for them.  

You’re likely to qualify if you’re getting any of these benefits: 

• Universal Credit 
  
• Income-based Jobseekers Allowance 
  
• Income-related Employment and Support Allowance 
  
• Income Support 
  
• Working Tax Credit 
• Child Tax Credit 
  
• Pension Credit. 
  

If you’re not getting these benefits and are living on a low income, it’s important to make sure you’re getting everything you’re entitled to.

The exact dates for when people will get their Cost of Living Payments haven’t been released yet, but the government has shared their plan for when they’ll make the payments and how much they’ll be:  

• £301 – first Cost of Living Payment – during Spring 2023 
• £150 – Disability Payment – during Summer 2023 
• £300 – second Cost of Living Payment – during Autumn 2023 
  
• £300 – Pensioner Payment – during Winter 2023/4 
  
• £299 – third Cost of Living Payment – during Spring 2024. 
  

Simple things like making sure you unplug phone chargers, not leaving things on standby and using energy efficient light bulbs are the first steps. Remember, if you use more, you’ll pay more.

You can also improve the energy efficiency of your home with double glazing and insulation.

As energy prices are going up, your monthly payments will increase too. However, if you think the payments you’re being asked to make are excessive and you already have a lot of credit in your account, you can ask your supplier to change them. The Ofgem code for suppliers that applies in England, Scotland and Wales states that they should set a fair Direct Debit and be able to explain to you why that amount is reasonable. If they can’t, you can ask your supplier to refund some of your credit.  

MoneySavingExpert has a calculator to help you work out what your monthly payment should beOpens in a new window  

Winter energy bills are usually much higher than summer ones, so instead of charging you for what you use each month suppliers will often take your yearly usage and divide it into 12 chunks, so the cost is more evenly spread. This could explain why you’re being charged for more than you’re using. You can ensure your bills are as accurate as possible by taking regular meter readings, if you have a smart meter your readings are sent off automatically.  

You can find schemes, grants and benefits that will help with both the cost of billsOpens in a new window and installing energy saving measures at Ofgem.

If you live in Scotland, find out what extra financial support you might getOpens in a new window from Home Energy Scotland.

If you live in Wales, find out what extra financial support you could getOpens in a new window from Discretionary Assistance Fund. For energy saving tips and home improvement grantsOpens in a new window go to nest.gov.wales.

If you live in Northern Ireland, find out more about the emergency fuel payment schemeOpens in a new window at  Byrson Charitable Group.

For energy saving tipsOpens in a new window check out nidirect.

Use this checklist to keep costs down: 

• compare prices and don’t be afraid to haggle 

• consider joining or setting up an oil club to get further discounts 

• ask about flexible payment options 

• buy in the warmer months 

• keep your tank well-maintained  

• install an efficient boiler.

Claim all the benefits you’re entitled to (especially Pension Credit or Universal Credit) because these will passport you to further help, including Warm Home Discount worth £150 a year.

While it’s rare for a big energy supplier to go bust, lots of small energy companies have gone bust over the past year.

If this happens, the ‘Ofgem safety net’ makes sure you aren’t left without energy. The safety net moves you automatically to a new energy supplier, onto a new deal.

If your energy supplier has stopped trading, it’s important to sit tight, don’t switch and wait until your new provider contacts you. Your new supplier will be chosen by Ofgem, which can take several weeks.

If you're already in the process of switching, your switch will still go through.

Make sure you take a meter reading so that you’re ready for when your new supplier contacts you.

It’s also worth keeping old energy bills and waiting until your new supplier is appointed before cancelling any Direct Debits. 

Any credit on your account will be protected. The balance is transferred to your new supplier, who will pay you any outstanding credit – minus any energy you have used but not been billed for. 

It’s important you don’t switch tariff or supplier until your account is moved to the new supplier. You might find it harder to get any money you’re owed if you switch before this happens.

If you owe money and your supplier goes bust, your debt will be transferred to the new provider and you’ll still have to pay.