What to do if you’re worried about your energy bills rising

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.

The energy price cap only affects you if you live in England, Wales or Scotland. 

In Northern Ireland, energy prices are governed by the Utility Regulator. You can find out more about the help available with paying your energy bills on the Consumer Council website.

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

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. This process could take longer if you were with a larger supplier like Bulb, but they should still be in touch to keep you updated.

Find out more about what you can do as a Bulb customer at OfgemOpens in a new window

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.

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 cap is expected to rise again in October 2022, so you’ll need to be ready to review what you’re paying again to see if it’s time to switch. Ofgem has warned the energy price cap could rise to around £2,800, an increase of over £800 on the current limit.

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

All domestic energy customers in England, Scotland and Wales will get £400 off their energy bill from October 2022. That’s an extra £200 on top of the £200 offered back in March. You will no longer have to pay this money back.

If you pay your bills by Direct Debit or credit, the money will be credited to your account.

If you have a pre-payment meter, the money will be either added to your meter or you’ll get a voucher to use for top-ups.

If you live in Northern Ireland, you’ll get equivalent support.

If you’re on means-tested benefits you’ll get a £650 cost of living payment, paid in two instalments alongside your existing benefits.

The first instalment is due to be paid in July 2022 and the second in the autumn.

The payment will be tax free, won’t count towards the benefit cap and won’t affect your eligibility for any other benefits you’re getting now.

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.

All pensioner households receiving the winter fuel payment will get an extra £300 on top of their annual payment. This should be paid to you automatically into your bank account in November or December 2022. You don’t need to claim it.

This payment won’t affect any benefits you’re already getting and will be paid alongside other support you might qualify for, such as the £650 cost of living payment if you’re getting Pension Credit.

You’ll get an extra £150 paid to you in September 2022 if you’re getting any of these disability benefits:

• Disability Living Allowance
• Personal Independence Payment
  
• Attendance Allowance
  
• Scottish Disability Benefits
  
• Armed Forces Independence Payment
  
• Constant Attendance Allowance
  
• War Pension Mobility Supplement.

The payment will be tax-free, won’t count towards the benefit cap and won’t affect any other benefits you’re getting now.

It will be paid on top of the £650 cost of living payment you may also qualify for if you’re getting certain means-tested benefits, such as income-related Employment and Support Allowance.

In April, all households in England in Council Tax bands A to D will begin to receive a one-off £150 rebate on their Council Tax bill that won't need to be paid back. If you’re still waiting to receive the £150, councils have until September 2022 to finish making payments, so get in touch with your council to find out when you should expect yours. 

You can check what tax band your home is in at GOV.UKOpens in a new window

If you’re paying by Direct Debit, the rebate might be automatically discounted from your April bill by your local authority. If you pay less than £150 a month, you’ll get the discount across two payments. Some councils are sending out the £150 as a direct payment into your bank account. If you don’t pay by Direct Debit, your council should start to process the discount from April. 

If you are renting or do not pay your Council Tax bill directly, make sure you ask the person (such as your landlord) who does to pass the discount on to you.

In Scotland, properties in bands A-D as well as households in all bands who get Council Tax Reduction will also receive £150 towards their Council Tax. Individual councils have been given the choice to either send the £150 as a payment or to give it as a discount on Council Tax bills. You should start to receive your discount or payment in April 2022.

The Welsh government has also approved a £150 payment to households in Council Tax bands A-D and those in bands E or F who receive Council Tax Reduction. People who pay their council tax by Direct Debit should start to receive payments in April 2022. You can find more information about whether you’ll need to register for this or if it’ll be paid automaticallyOpens in a new window on the Swansea council website.

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.

Although you’re not covered by the price cap or some of the discounts available to people on mains gas 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 on the Ofgem website.

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 on the Byrson Charitable Group website.

For energy saving tipsOpens in a new window go to the nidirect website.

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.