For millions, there’s nothing left to cut – so getting through the winter will mean thinking bigger than the government’s guarantee
A couple of weeks ago, before the new government’s Energy Price Guarantee was announced, it emerged that people living in Shetland would need to earn £104,000 a year to avoid plunging into fuel poverty this winter.
It was just one striking illustration of why something had to be done. And sure enough, on September 8, new PM Liz Truss unveiled the guarantee (for homes in England, Scotland and Wales. The same levels of support have been promised for homes in Northern Ireland).
Gone were the fears of average bills of £3,549 – and the widely anticipated rise to £5,600 from January. But the guarantee still represents an increase for households on default tariffs – and potentially a big rise for those moving on to them from fixed deals.
The new rates covered by the guarantee will come into force on October 1 and will remain in place for two years. The support package worth £400 per home will be paid as planned, as will extra payments for those on certain benefits.
So, while the guarantee is as welcome as it is necessary, its announcement some weeks after the October price cap was circulated only added to confusion. That it was announced on the same day as the death of the Queen meant the whole plan was old news almost as soon as it was unveiled.
The clock is ticking
Both these facts mean the clock is ticking down to the new unit prices kicking in, potentially leaving many households still unsure how they’ll be affected. References to typical annual bills (the £2,500 mentioned in the guarantee) are a useful shorthand, but mask the fact that it’s the unit costs that are capped. (Below are the Direct Debit charges; as usual prepayment charges are higher.1)
| Current price cap (until September 30) | Energy Price Guarantee (from October 1) | |
| Gas | Unit rate: 7.37p per kWh Standing charge: 27.22p per day | Unit rate: 10.3p per kWh Standing charge: 28.49p per day |
| Electric | Unit rate: 28.34p per kWh Standing charge: 45.34p per day | Unit rate: 34p per kWh Standing charge: 46.36p per day |
As such, people will pay a lot more if they consume a lot of energy. The flip side, however, is that the consumer still holds on to a small amount of agency over bills. Cutting back, for those who still can, will mean lower bills.
But cutting back is harder for some than for others. Those in Shetland, for example, where it gets cold and there is no access to mains gas.
Likewise, for people with disabilities, energy use isn’t an expense they can just slash at will. The government’s guarantee is clearly aimed at ‘typical’ energy use, but very often there’s nothing typical about the lives of the most vulnerable.
All disabled people are struggling even more to be able to use and pay for gas and electricity
Sophia, Clean Slate service-user
Clean Slate service-user Sophia is 30 and lives with Ehlers-Danlos syndrome, which affects her joints and skin. She’s fearful about what the coming months will bring.
“I’m very worried about winter and being able to afford the bills,” she says. “The £400 that the government are giving us will not make much of a difference as it is already difficult to afford my energy and bills. I’m worried more about when winter arrives and how I’m going to afford to heat my home and afford my bills and care costs.”
The guarantee caps unit costs, but for Sophia to go about her day-to-day life she needs to use large amounts of energy.
“There isn’t enough support for disabled people during the energy crisis and all disabled people are struggling even more to be able to use and pay for gas and electricity,” she says. “I have to have the heating on a lot more, even in autumn, as the cold causes a lot more pain in my joints.
“I also have quite a bit of equipment to help with my disability which I have to use daily and end up using a lot of electricity – charging my wheelchair, an electric bed and chair as well as using an electric leg lifter every day. I also have to use a nebuliser as well as technology around the home to help me. It all adds up.”
Ways to weather the crisis
It’s easy to see why Sophia is worried about winter – but her usage is higher than the typical amount all year round. As she sees it, the government’s guarantee disproportionately helps the households that can cut back more easily. She sees an opportunity to improve the plan though.
“I don’t think the government’s Energy Price Guarantee is the way to go, this is aimed at families,” she says. “Disabled people will still very much struggle to pay £2,500 a year for energy, I know this as someone whose sole income is ESA and PIP.
“It would help if government was able to raise benefits in line with inflation and this would hopefully be able to provide more support for disabled people. It would also help if they would allow disabled people to claim back any costs of running medical equipment, like breathing equipment, that is provided by the NHS.”
So that would be one way for the most vulnerable to weather the crisis – targeted government support in tandem with protections for those most at risk. This goes hand in hand with speaking to energy suppliers as soon as difficulties begin to loom large.
Because, at Clean Slate, our support workers have known for some time that cutting costs no longer cuts it for people on the lowest incomes. Quids in! advice on energy saving in the home and cheap ways to get food on the table sometimes feel like fiddling at the edges of a much greater issue. But of course it still stands – none of our service-users can afford to be spending money they don’t have to.
It’s more than that now, though. For many of the people we see, the last of the fat has long since been trimmed, meaning the only possible course of action is bringing in more money. Clean Slate is advocating a ‘think bigger’ approach – a 360-degree look at finances to make sure nothing is slipping through the net.
For people already on benefits, it’s easy to assume that base is covered. But the £15bn that sits unclaimed in government coffers every year would suggest that’s not the case. When Clean Slate staff asked the right questions of the people they support, they uncovered a total of around £250,000 that was theirs for the taking (£229 per person per year, on average). It boils down to the fact that people don’t know what they don’t know. A benefits calculator could come up trumps, but only if people know these things exist.
Asking the right questions
We’re always banging the drum for the Quids in! Money Health Check, but sometimes it’s only when people are asked the right questions that they see a different means of improving their situation. It sums up what we mean by taking a 360-degree look at where people are with their finances and where they can realistically get to.
For some, this will be work or better-paid work. Payrolled worker numbers are at a record high, although the overall employment level has recently fallen back very slightly. The previous high in unfilled vacancies has also dropped a little, but for those thinking about work there are still more than 1.2 million jobs out there.
Again, this is where support can come in. Getting to grips with the benefits that can be retained when someone moves into work or moves up the employment ladder can remove the uncertainty and shine a light on new opportunities.
And sometimes, the barriers keeping people out of work are relatively simple and easy to manage – digital literacy, flexible working and ongoing support long after the employment contract has been signed. Making it less intimidating for people to top up their skills, for example by taking training into the community, can also be key.
But for Sophia, and millions of others like her, the questions are much trickier and as the clock ticks down to the latest rise in energy bills, the options are in short supply.
- (The figures in the table are for Direct Debit payments; for comparison the gas unit cost for prepayment meters will be 15.06p per kWh with a daily standing charge of 37.51p while electricity will be 50.93p per kWh with a daily standing charge of 51.41p.)
