Energy price guarantee

We welcome yesterday’s announcement that the Energy Price Guarantee (EPG) will remain at £2,500 for another three months, rather than rising to £3,000. We were pleased to support Money Saving Expert’s campaign asking not to increase the EPG to £3,000. However, while this is a positive announcement it’s important to remember that the current EPG represents a much higher cost than energy bills last year, and that yesterday’s announcement is only a temporary measure with the EPG expected to rise to £3,000 in July, a cost that will be unaffordable to many. It was also disappointing that there will no extension of the Energy Support Scheme (ESS). There is therefore a need for the introduction of a social tariff – a discounted energy deal for people on low incomes or in fuel poverty, and we continue to reiterate our support for this. In a recent survey of our members, 64% of money advisers surveyed had clients with energy debt, and 82% had clients who were avoiding using their heating and other energy either because they knew they couldn’t afford it, or were too worried about the cost to even attempt using it. We worry how clients will get by once the ESS payments are stopped and the EPG rises.

Prepayment meters

We also welcome the announcement that prepayment meter customers will no longer be charged more than direct debit customers. This is a positive step in reducing the poverty premium associated with this type of payment. However, this announcement does not address the fact that energy prices remain unaffordable for too many, and that using a prepayment meter can serve as a barrier to accessing energy if the person using it simply does not have enough money to top up. With the Energy Support Scheme ending in a few weeks’ time, we are concerned that more prepayment customers will be unable to access energy.

 

Childcare and Universal Credit

While the announcement of increased support for childcare through Universal Credit is to be welcomed, the introduction of tougher sanctions for people claiming UC is not. Our recent Cost of Living report showed that going without essentials and having to decide whether to ‘heat or eat’ has become far too common for people receiving UC, and increasing sanctions in a cost of living crisis will only result in further hardship and reduced standard of living.

 

Abbey Fleming, Policy and Communications Lead at Money Advice Scotland said:

“While there are certainly some positives in yesterday’s budget, these simply do not go far enough to address the hardship that too many are experiencing as a result of the cost of living crisis.

“We need more targeted support to help those on the lowest incomes who are most affected by this crisis, in the form of a social tariff or other further support measures.”