Continuing our six degrees of energy news series, we’ve compiled summaries of the top stories surrounding your energy bill. Our round-up features six recent and connected stories providing an overview of some of the issues featured in the press that could have large implications for consumers.
Brush up on energy news and find out about the issues affecting you…
1) Rudd calls for larger cuts to ease energy bills
Newly appointed Energy Secretary Amber Rudd has spoken and written to the big six energy suppliers over their bill pricing.
Rudd has questioned whether the wholesale cost of fuel is truly reflected in consumer’s tariffs, and why large suppliers fail to lower their customer’s energy bills despite large enough margins and struggling customers.
With the fear of a Labour government’s price freezing now eradicated, many feel the big six have lost their main reason for not expanding on their recent single-digit cuts, and helping out consumers by lowering the cost of their gas and electricity bills.
2) Energy bills could now affect credit ratings
Experian recently reported that energy bills are to play a part in your credit rating.
As many of us use electricity and gas with estimated bills, we are potentially using credit by heating and powering our homes before we’ve actually paid for it — possibly indicating whether or not we would be a good customer for credit providers.
More manageable bill sizes called for by Amber Rudd have the potential to improve many people’s credit ratings, as the risk of being in debt to a supplier would be lower. Unfortunately, it also follows that it would be detrimental to a credit application if you had fell behind with energy payments, or had an ongoing dispute with a supplier over bills.
The introduction of this new inclusion in Experian’s credit scores is currently very vague — a continuous issue with credit reporting. Join our uSwitch petition and help us make credit reporting free, fairer, and fit for purpose.
3) Debt to suppliers reaches half a billion despite price decrease
An average big six price decrease of £28 pounds on an annual bill hasn’t had a positive affect on the level of money owed to suppliers by UK households.
Compared to 2014, uSwitch research revealed that almost 4,000,000 homes now owe their energy supplier money — averaging at £130. The collective UK energy debt of over half a billion is £43million more than customers owed last year.
To avoid energy debt, you can provide regular meter readings (so your supplier can adjust your payments accordingly), ensure your home is as energy efficient as possible, and check that you’re on the most competitive tariff.
4) Rising debt forces prepayment meter installations
Ofgem are investigating the amount of forcibly installed prepayment meters across over half a million UK homes in the last six years. The figures from BBC Radio 5 live suggest 97,000 prepayment meters were installed by gas and electricity suppliers last year alone.
Installing prepayment meters is often the last resort for suppliers to try and cap the debt from certain consumers, and requires a warrant to do so. With so many of these types of meters installed, it could be a reflection of the extent of people struggling with their bills in the UK.
5) Prepayment meters with competitive tariffs
E.ON is the first of the big six energy suppliers to offer out its most competitive tariffs to some of its prepayment customers.
30,000 existing customers will benefit from the pilot by having smart meters installed that they can top up through an app, online, or by phone.
Many of those on prepayment meters are renters struggling with bills, so offering them the cheapest tariffs through this scheme may help them to take control of their bills and avoid further debt.
Spark Energy have followed suit and revealed a tariff specifically for social housing tenants, allegedly knocking £110 off of the average big six prepayment meter tariff across 12 months.
6) First Utility want variable tariffs scrapped
First Utility, a challenger of the big six and home to 780,000 energy customers, has launched a campaign to scrap standard tariffs.
The motivation for the campaign is First Utility’s claim that bigger firms overcharge customers by around £3.4bn every year when they are rolled from a fixed plan onto a standard variable rate tariff.
However, First Utility have come under scrutiny from The Telegraph as it has been revealed that their own plan fixed price customers are rolled onto can amount in a large price hike.
uSwitch fixed plan research shows how those on iSave Fixed May 2015 from First Utility will see an average price increase of £121.37.