From 1 April 2021, Ofgem will introduce a new increase in the energy price cap, which will see it increase by £96 for default tariff customers, and by £87 for pre-payment meter customers.
According to Ofgem, default tariffs and pre-payment meters are already some of the more expensive energy options, and research shows that pre-payment meter customers are more likely to be living in fuel poverty.
However, Nicky Willshere, Chief Executive of Citizens Advice Ipswich, adds that this rise not only comes during a “tough jobs market and essential bills rising”, but also the rise will come “at the same time as the £20 a week increase to the benefit is set to end”. The £20-a-week increase to Universal Credit and Working Tax Credit is set to end on April 5.
To visualise the twinned effect of the price rise and the cut to the Universal Credit boost, the £20 uplift would cover nearly a whole week (six days) energy costs for a below average income household.
Indeed, in December, Citizens Advice research showed that 2.1 million households were behind on their energy bills, 600,000 more than in February 2020. That was with the reduced energy price cap and the £20 uplift. This could affect many of our clients, because since 1 March 2020, Citizens Advice has supported more than 350,000 people with Universal Credit.
As such, Nicky Wilshire argues that “now is not the time for the government to cut this vital lifeline”.