Struggling British Gas, OVO, and Octopus Energy customers are set to receive more financial support this winter with bills following talks with the Government.
The three companies have pledged a combined £120million as part of a broader £500million commitment from energy suppliers to help households manage soaring energy costs. Part of the funds will also go to charities assisting hard-to-reach consumers.
Companies will lend money to people to help cover costs, reduce standing charges, which make up a segment of all energy bills, and help fund a national debt advice campaign.
Ministers have been looking for ways to reduce the impact of cutting winter fuel payments for about 10 million elderly people, which officials estimate will push 100,000 pensioners into relative poverty this decade.
Ofgem’s price cap will rise by a further by 1.2% this winter, after wholesale prices rose by 10% in October.
Minister for Energy Consumers Miatta Fahnbulleh said: “The impact of the energy crisis is still being felt by people across the country, and the Government and energy suppliers are working in lockstep to help vulnerable households this winter.”
She said the support from companies combined with the Government’s warm homes plan, which will help fund home upgrades to make properties more energy efficient, will come to about £1billion of support.
Ms Fahnbulleh will also lead a working group with industry representatives as part of a push to make energy more affordable on a long-term basis.
Several suppliers have called for a social tariff, something which is already used in the telecoms industry to help people who receive benefits like Universal Credit pay their broadband bills.
The measure, which campaign groups have been supporting for several years, would offer a discounted rate for low-income households, cheaper than standard tariffs.
Dhara Vyas, boss of the trade body Energy UK, pointed to record high levels of consumer debt of £3.7 billion in June. She said many people are “yet to recover from a sustained period of high energy bills and an accompanying increase in the cost-of-living”.
Ms Vyas said: “As in previous winters, energy suppliers have already been stepping up the amount and range of support they offer to customers. There is, however, only so much they can do when a large number of households are struggling to afford energy at the price it costs to supply it.
“We’ve very much welcomed the Government’s constructive approach in our discussions so far and the recognition this is not a temporary problem.
“The establishment of a working group and the commitment to look at how data sharing can help target support are important steps towards putting in place an enduring plan for future winters.”
Britons struggling with their energy bills can visit their respective suppliers’ website to find out what support is available.
British Gas is offering up to £2,000 worth of support, while Octopus customers can seek help through its £30million Octo Assist Fund. Customers can get access to free electric blankets, winter fuel payments, and standing charge waivers.
