Government must increase energy bill discount by at least 150%, Which? warns

The Government must raise its energy bills discount by at least 150% or risk pushing millions of households into financial distress, Which? has warned.

The watchdog 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.

The existing support package is inadequate to protect living standards for those on the lowest incomes and would lead to considerable financial and social hardship, it said.

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.

But Which? warned that even a 150% increase in help would be insufficient for families on the lowest incomes, and said the Government must also provide them with an additional one-off minimum payment of £150 to ensure the most vulnerable have the support they need.

And it said 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.

Which? is calling on the Government and 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.

“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.”

Labour spokesperson Pat McFadden said: “With each passing day and each new report, the huge scale of the energy price challenge facing households becomes clearer. People will struggle to pay for basic necessities and the Conservatives are scrambling around with no solution in sight.

“Labour has a fully-funded plan to make sure households don’t pay a penny more for their energy this winter, saving £1000 on energy bills.”

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 £37 billion 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 £6.6 billion 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.”