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Cheap fixed deals are falling short at supporting vulnerable consumers

Cheap fixed deals are falling short at supporting vulnerable consumers

Under current Government rules, suppliers with 250,000 or more customers must offer 'Warm Home Discount' (previously set at £140 for 2015/16) to households considered vulnerable; this means they may need help covering their energy bills during the winter months, when energy bills tend to be the most expensive.

The Warm Home Discount is taken directly out of the cost of the energy bills over the winter months (October – March), reducing the price of bills for those receiving it.

However, with just two out of the top ten fixed deals being by offered by suppliers in the scheme — vulnerable consumers have a reduced choice of cheap energy plans to switch to; this is down from six of the top ten deals in May 2015.

Who is eligible for the Warm Home Discount?

In previous years, you are automatically eligible for the Warm Home Discount if in July you were:

  • In receipt of the Guarantee Credit element of Pension Credit (no Savings Credit)

or

  • In receipt of the Guarantee Credit element of Pension Credit (even if you get Savings Credit as well)

This group is referred to as the 'core group' of those eligible.

However, some consumers are still able to get the Warm Home Discount, depending on their supplier's own extended criteria. Some suppliers also offer the discount to a wider group of customers who may be at risk of fuel poverty, such as low income households and especially those low income homes that have small children.

In these cases, each supplier has its own eligibility criteria and a limit on how many discounts it will pay out. Contact your current energy supplier to find out more.

Just two of the ten best energy deals are from suppliers participating in the Warm Home Discount scheme

These vulnerable consumers eligible for Warm Home Discount are facing increasingly limited choice when looking to switch to the market’s best deals.

Below is a table of the cheapest energy plans currently on the market, and whether the suppliers offer Warm Home Discount:

Supplier Plan WHD?
Iresa 12 month Fixed Direct Debit No
Avro Energy Simple and Connect No
Sainsbury's Energy SE Fixed Price May 2017 Yes
GnERGY GnERGY Fixed June 2017 No
Places For People Together – September 2017 – fixed 32 No
Flow Energy Connect 6 No
GB Energy Fixed 12 Ruby No
Octopus Energy Octopus Variable No
Extra Energy Fresh Fixed Price Oct 2017 v1 Yes
So Energy So Dragonfly No
 

Ann Robinson, Director of Consumer Policy at uSwitch, says: “Energy prices are felt most acutely by people with the least to spend, including the elderly, disabled people and low income families.

"They have the most to gain by switching energy supplier, yet many will feel forced to remain with larger providers to avoid losing their £140 Warm Home Discount.

"It is simply not fair that vulnerable customers face barriers to switching to the market’s best deals."

uSwitch is now calling for the Government to extend the Warm Home Discount to be compulsory for all suppliers, to increase choice and help remove barriers to switching for millions of consumers who are often in the greatest need of lower bills.

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