Personal Finance

Energy firms work together for plan to help Britons as bills forecast to rise to £3,300

MAJOR energy firms have come together to commit to offer more help to Britons as bills look set to rise to more than £3,300 a year this winter.

Chief executives of British Gas, Octopus, EDF, E.on, Ovo and Shell Energy met with a number of leading charities and Money Saving Expert boss Martin Lewis to discuss what could be done ahead of what is expected to be another tough winter for billpayers.

Their meeting on Wednesday comes as gas and electricity bills were forecast to hit £3,363 in the new year, according to analysis by energy consultancy firm Cornwall Insight.

The current energy price cap is £1,971 a year after coming into force in April. It is due to be reviewed again in August with changes coming into effect in October.

Cornwall Insight predicts a typical customer will be paying £3,244 from October, and then £3,363 from January.

During the meeting of energy suppliers, bosses decided to come together to offer standardised support.

Although this won't mean bills will be reduced, they promised to look at:

  • Creating a universal tool to outline all assistance available to people struggling.
  • Devising a blueprint to deal with customers who can't pay their bills so all those struggling are treated the same, with principles created with the input of debt charities.
  • Launching a call line to put billpayers in touch with the right people to help them.
  • Ask Ofgem to shift the burden of bills away from the standing charge - the fixed daily payment which covers the cost of supplying the energy ie. connecting a home to the grid.

As well as setting the maximum charge for those on a standard tariff, Ofgem also sets a limit on the maximum daily standing charge. The standing charge means billpayers will still be bound to pay a set amount even if they don’t use any energy at all.

In addition, the group of suppliers are considering becoming more transparent in explaining how they come to their calculations for bills with various payment options.

They promised to look at publishing full details of deals only available for existing customers so they can shop around more easily.

Stephen Fitzpatrick, founder and CEO of Ovo said: "In the energy crisis, energy companies need to be fighting for lower costs and finding new ways to help customers.

"This is going to be a very difficult winter for millions of customers. The problem is so big that we really need more support for vulnerable customers from the Government, but we also need to do everything we can to help as much as possible.

“Getting everyone around the table to find ways to help customers through this was a crucial first step. There is a lot of work to do but this meeting was a good start.”

The group will meet again in September to see how plans are progressing and if more can be done.

Read our analysis on whether you should switch energy suppliers now ahead of the October price cap rise.  

Erin Yurday

Erin Yurday is the Founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.


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