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Energy bill discount must go up to £1,000 to help UK households, Which? warns

Energy bill File photo dated 08/04/19 of a handheld smart meter in a London home. Householders are experiencing plummeting standards of customer service from their energy suppliers including rising call waiting times as their bills soar, according to Citizens Advice figures. Issue date: Friday April 8, 2022.
The government must raise the energy bill discount by at least 150%t or risk pushing millions of households into financial distress. Photo: PA

Millions of UK households risk being pushed into financial distress unless the government lifts the energy discount by at least 150% this winter amid soaring energy bills.

Which? said the government’s financial support for all households must increase from the current £400 to £1,000 – or from £67 to £167 per month from October to March – following soaring energy price cap predictions.

“Even this will be insufficient for families on the lowest incomes, so the government must also make an additional one-off minimum payment of £150 to the lowest income households to ensure the most financially vulnerable have the extra support they need,” the consumer body said.

Read more: Some 1.9 million UK households defaulted on bills in the last month

When the government first announced its financial support package in May, the energy price cap was predicted to reach around £2,800 in October.

Analysts Cornwall Insight now predict that average energy bills will increase to £3,554 in October and hit £4,650 in January.

Which? said that even the additional support would only be a temporary solution until March, when energy prices are predicted to hit £5,341 for April and remain high throughout 2023.

Energy bills are set to soar
Energy bills are set to soar

The consumer body is calling on the government and energy regulator Ofgem to undertake an immediate review of retail energy pricing – including the price cap – and rapidly improve the insulation of homes to reduce costs, lower the reliance on gas and support the transition to net zero.

Rocio Concha, Which? director of policy and advocacy, said: “With energy bill predictions continuing to spiral, the government must increase the Energy Bills Support Scheme by at least 150%, or risk pushing millions of households into financial distress this winter.

“While increased support will provide relief for many, it is not a long-term solution. The government and regulator must urgently undertake a wide-ranging review of retail energy pricing – including the price cap – to build a fair and affordable system for consumers.

Read more: TUC calls for £15 minimum wage amid cost of living crisis

“The government must also develop a programme to urgently improve the insulation of homes – as this will help to reduce people’s energy costs for years to come.”

A Department for Business, Energy and Industrial Strategy spokesman said: “We know the pressures people are facing with rising costs, which is why we are taking direct action to help households with £37bn worth of support.

“In addition to providing eight million of the most vulnerable households with £1,200 extra support this winter, we are also investing £6.6bn in this parliament to improve energy efficiency as part of the government’s ‘Help to Heat’ programme which is helping make households across the country cheaper to heat.”

Watch: Why are gas prices rising?