Energy firms leave customers in the DARK: Bills set to hit £4k a year

0
43


It is Monday morning at Woolwich library and a middle-aged man is on the verge of tears. He has been struggling to redeem an energy voucher from British Gas for his disabled neighbour and — as power prices surge — he is desperate for help.

Standing at the entrance, near shelves of children’s books and computers, you might think he has come to the wrong place.

But this library in South-East London is home to a ‘drop-in’ energy bill help service which provides vital support to residents.

Energy crisis: Over the past few weeks, suppliers have been hitting households with shock details of their alarming new bills ahead of the 54% price cap hike next month

Energy crisis: Over the past few weeks, suppliers have been hitting households with shock details of their alarming new bills ahead of the 54% price cap hike next month

Britain is facing an unprecedented energy price crisis — with the average bill tipped to top £4,000 later this year.

Over the past few weeks, suppliers have been hitting households with shock details of their alarming new bills ahead of the 54 per cent price cap hike next month.

These price rises have caused fear and panic — with many people struggling to get the answers they need from providers.

Frustrated, customers are turning to local support instead. There are 400 ‘energy communities’ around the country which aim to help customers keep on top of their bills.

The service in Woolwich has been running for nearly a decade but volunteers say demand has never been higher.

And while they once mainly supported low-income families, there is now a wider range of people needing their help.

Charities Age UK and Citizens Advice have also been flooded with pleas for help.

It is an illustration of how hard the energy price crisis is hitting all households.

But it is also a damning indictment of the nation’s energy suppliers who are failing to help their customers when they need it most.

In just over three weeks’ time on April 1, the energy price cap, set by regulator Ofgem, will rise 54 per cent from £1,277 to £1,971.

Meanwhile, many fixed-rate tariffs currently cost more than £4,000 — a stark increase from the £900 average two years ago. And we aren’t at the peak of the crisis.

Bill hikes: Many fixed-rate tariffs are set to cost more than £4,000 ¿ a stark increase from the £900 average two years ago

Bill hikes: Many fixed-rate tariffs are set to cost more than £4,000 — a stark increase from the £900 average two years ago

The conflict in Ukraine — and the looming threat of Western sanctions being imposed on Russian oil and gas exports — is continuing to push up market prices.

As a result, the cost of natural gas in Europe reached a record high this week. It means the number of fuel-poor households could double in the next year, according to estimates by the National Energy Action.

Yet desperate households say they are struggling to get through to their suppliers on the phone, and cannot understand their bills.

So we went to see the volunteers in action as they seek to fill the advice void and help households struggling to cope.

Giovanna Speciale, 50, had the idea to set up a community group to help residents better understand and reduce their energy bills back in 2014.

She was concerned about rising rates of fuel poverty in South-East London and wanted to educate those struggling with their bills about how they could heat their homes more efficiently. 

Eight years on, even she could not have predicted what a lifeline the service would become.

‘Demand has doubled in the last few months,’ she says. ‘We did 286 one-to-one appointments in January and February.

‘There are six advisers working for us and they all have a waiting list of around 30 people.’

South-East London Community Energy (Selce) is not the only organisation shouldering the weight of customers’ distress. A similar group in Plymouth says its caseload has grown by 650 new households.

Citizens Advice issued a ‘red alert’ as they found more people needing one-to-one support than at any point during the pandemic.

In January alone, more than 270,000 people sought their help. The trend, they say, is being driven by rocketing energy bills.

Energised: Giovanna Speciale has been offering support in London

Energised: Giovanna Speciale has been offering support in London

Age UK has also expressed alarm about how the crisis is impacting the elderly population. Figures from the charity earlier this year showed three-quarters of over 65s are worried about the rising cost of living.

It is clear nobody is immune from soaring bills — and the services which are designed to help are at breaking point.

When I visit, Giovanna is carefully setting up a stall in the chilly entrance of the library. 

‘There are leaflets on the table along with draught-blockers, which the team hand out. A sign looms overhead saying ‘get impartial advice and reduce energy costs’.

I’m told the location is deliberate, as this is where people come to keep warm when they don’t want to spend money on heating.

Giovanna is joined by one volunteer — a retired investment banker — and a full-time paid adviser. They are part of an 11-strong team.

The clinic — run ad-hoc across several locations — starts at 10am and lasts until 2.30pm. By the time they’re set-up, there are already two women waiting to chat.

One of them hasn’t turned her heating on for more than three years due to concerns over cost.

The adviser, Sonia Haddad, looks unsurprised and calmly rings British Gas to ask how they can better support their customer. 

Her job mainly entails liaising with energy suppliers on behalf of vulnerable customers. If they have run up debts, she attempts to negotiate them down.

She, along with the other advisers, also conduct ‘home visits’ where they check residents’ meters are working effectively and that homes are properly insulated.

Sonia is used to dealing with the community’s most poor. But recently she’s noticed a change.

‘I saw a family in their home who were on a good income,’ she says.

‘Now costs are so high that if you’re a mother at home with children you’re going to run up bills.’

It is little wonder that tensions are running high at the drop-in.

While I am there, the man trying to redeem vouchers for his neighbour gets into a tense war of words with British Gas over the phone. Within ten minutes, the customer service team hangs up. 

Giovanna is exasperated. She regularly sits in meetings with watchdog Ofgem and has called for minimum requirements for customer service.

Soaring costs: Britain is facing an unprecedented energy price crisis - with the average bill tipped to top £4,000 later this year

Soaring costs: Britain is facing an unprecedented energy price crisis – with the average bill tipped to top £4,000 later this year 

The Selce team pays around £300 a year to access a special ‘adviser’ helpline. This means they should get through to suppliers quicker.

But this is seldom the case as advisers have been left on hold for as long as two hours recently.

The situation is much worse for everyday customers.

Giovanna says: ‘Nobody should be on the phone for more than 25 minutes to reach their supplier.

‘People end up coming to us instead because they want to be treated like human beings.’

Yesterday, callers ringing British Gas and Scottish Power’s customer lines were told they may have to wait for 30 minutes. Meanwhile E.On and EDF both warned customers they faced ‘longer waits’ than usual.

It hasn’t escaped the Selce team’s notice that customer service numbers are also increasingly difficult to find on suppliers’ websites.

They believe these details are deliberately concealed as suppliers can’t cope with the number of customers ringing with concerns.

Instead, they would rather customers use ‘live chat’ services but many struggle to deal with complicated queries. It means customers are left overwhelmed with nowhere to turn.

When Money Mail checked the websites of major suppliers yesterday, not one advertised its helpline on the homepage.

It took two minutes and 40 seconds to find British Gas’s details, which involved scrolling through pages of text. By contrast, it took 23 seconds to find Octopus’s contact number, which was one click from the homepage.

Numbers were often buried below invitations to ‘live chat’ the supplier.

Abandoned: Desperate households say they are struggling to get through to their suppliers on the phone, and cannot make head nor tail of the bill hikes

Abandoned: Desperate households say they are struggling to get through to their suppliers on the phone, and cannot make head nor tail of the bill hikes

EDF and SSE required customers to answer questionnaires before they revealed the number. SSE asks you to select a topic but if you choose direct debit, a number doesn’t appear. 

You have to pick ‘complaints’. An Ofgem spokesman says suppliers must have customer service systems and processes that are adequate and fit for purpose.

Customers are also struggling to work out how suppliers have calculated their bills. Some firms have added to the confusion by promoting more expensive fixed tariffs. Scott Byrom, chief executive of the Energy Shop, recently helped his wife’s aunt dissect a 17-page bill sent out by her supplier Ovo.

He says: ‘We are the experts and even we are confused. There is no way the everyday customer can work out what is going on.’

Soaring costs have left customers so confused that many have no idea what is a fair price. There have been reports of suppliers sending bills which have later been negotiated down by customers. 

That is why experts recommend contacting your provider if you think your bills have been hiked unreasonably.

Mr Byrom says: ‘Customers should be challenging their bills. There is an element of suppliers hiking prices to the extreme to cushion themselves from future increases in costs.

‘But we have heard of people getting their bills down by fighting back.’

If you are on a standard variable tariff (SVT), you should expect to see a rise of 54 per cent. 

However, your increase could be larger than this if your monthly payments did not cover your energy usage over the past year, meaning you have debt to pay off.

Similarly, you will face a bigger hike if you have been on a fixed-rate deal, which has historically been much cheaper than the SVT. But the crisis has all-but wiped out these deals.

According to the Energy Shop, there are only three available on the market, ranging from £3,800 per year to £4,172.

The cost of natural gas in Europe reached a record high this week. It means the number of fuel-poor households could double in the next year

The cost of natural gas in Europe reached a record high this week. It means the number of fuel-poor households could double in the next year

There was some hope last week when E.On offered one and two-year deals costing around the same as the upcoming price cap. This deal could insure against future hikes — but customers should check the terms.

Mr Byrom says: ‘If you can find a fixed-rate deal, you need to look out for high exit fees. You don’t want to be locked into a deal if prices fall.’

A spokesman for trade body Energy UK says: ‘Suppliers will keep doing all they can to help but there is a limit to what they can do in the face of such price rises, which could leave millions more than usual looking for help.

‘Nearly 30 suppliers have gone out of business since August and almost all of those left are making substantial losses, so sadly they are not in a position where they can hire extra staff.’

Centrica, which owns British Gas, saw profits more than double to nearly £1 billion last year.

For Giovanna, the crux of the crisis is that customers simply do not understand the energy market.

‘People come to us very confused,’ she says. ‘They don’t understand how their bills have become so high when their behaviour hasn’t changed.

‘Many don’t realise what they can get. I’m always telling people to apply for the Warm Homes Discount. I want people to know their options.’

Her colleague Sonia is perhaps a tad more cynical.

‘I’m hoping for nice weather,’ she says. ‘It’ll be too expensive for people to heat their homes after April.’

[email protected]

Here’s where to turn for some help 

Warm Home Discount 

About 2.2 million households qualify for the Warm Home Discount, worth £140 a year. It is paid automatically to those who receive the Guarantee Credit element of Pension Credit. Others on low incomes can also apply to their supplier if they meet the eligibility criteria.

Winter Fuel Payment

If you were born on or before September 26, 1955, you could get between £100 and £300 to help with your heating bills. You will get it automatically if you claim the state pension or certain benefits. If not, you may need to claim it. The deadline for a discount on your 2021-2022 winter bill is March 31, 2022.

Priority Services Register

Each energy provider keeps their own Priority Services Register — a free support service for vulnerable customers. Contact your supplier or network operator to find out if you can be included.

Local Energy Communities

There are more than 400 energy communities around the country. These groups can provide one-to-one consultations, conduct home visits to check your house is being heated efficiently and liaise with your supplier if you are struggling to cope with bills.

To find your local group, search online or contact your local council for details.

Charity support

Citizens Advice offers free, independent guidance to anyone struggling with their bills. You can contact the charity on 0808 223 1133.

Alternatively, Age UK offers support to the elderly. Its advice line is 0800 678 1602.

 

  

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

LEAVE A REPLY

Please enter your comment!
Please enter your name here