Campaigners have called for more to be done to help disabled and vulnerable households with their energy bills (Image: Getty)

PIP and DLA claimants issue new plea to Ofgem and government for energy support

by · Birmingham Live

A new plea has been made to Ofgem and the government for a special energy discount for those on benefits such as Personal Independence Payment (PIP), Disability Allowance (DLA) and Attendance Allowance. Disability campaigners have welcomed Ofgem's announcement of tariffs with zero standing charges but say they do not address the "fundamental" issues.

Under Ofgem's plans, energy firms will have to offer household tariffs without any standing charges by next winter to help address soaring levels of energy debt. It is also proposing new standards for suppliers to make it easier for customers who are struggling to pay their bills to get help.

Standing charges have risen by 43 per cent since 2019 and will cost dual fuel households an average of £338 a year from January. Some suppliers already offer low or no standing charge tariffs, which are at least 10 per cent below the price cap, but they are not universal. Tariffs that come with a lower standing charge tend to have a higher unit rate, and are therefore more likely to benefit customers who use less energy.

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Ofgem said tens of thousands of consumers responded to its call for input on standing charges, with many asking for them to be removed altogether, saying that this would make it easier for them to manage their bills or pay back debt. However, those who were high users of energy, often for medical and health reasons, would see their bills rise significantly, meaning it was important for households to retain a choice of tariff.

Ofgem also set out plans for a debt guarantee to improve the standard of service offered by suppliers who are supporting customers in debt, which it said would give households "consistent, compassionate and tailored support." Suppliers could also be required to accept debt repayment offers from reputable third parties such as debt advice agencies or consumer organisations.

Energy debt and arrears have continued to grow, reaching £3.82 billion in September – a 91% or £1.82 billion increase in two years. Advice service National Debtline says energy debt is the second-most common debt among people it helps – behind credit cards – with the average amount owed in energy arrears increasing by 37 per cent in the past year to £1,541.

David Southgate, policy manager at disability equality charity Scope, said: "We welcome Ofgem’s proposals to tackle problem debt and broaden the range of tariff options available to disabled customers. Low and no standing charge tariffs can be a lifeline for prepayment meter users on lower incomes. But they can also push up unit rates for higher energy users.

"A broader range of tariff options is good, but Ofgem must ensure disabled people are given the choice of what option works best for them. While these new proposals are welcome, they still do not address the fundamental affordability challenges disabled people face. The government must intervene and bring in discounted bills for disabled households."

National Energy Action said Ofgem's "lack of any significant reform" of standing charges was "extremely disappointing." The charity’s director of policy and advocacy, Peter Smith, said: "There is significant public concern around how high standing charges are. All major political parties made promises in their manifestos to reduce standing charges.

"Households that use prepayment meters are particularly impacted by the continuation of high standing charges. While several options to better protect prepayment meter households have been identified, Ofgem has opted to do nothing, leaving vulnerable households in often dire situations."

Citizens Advice head of energy policy Alex Belsham-Harris said: "We hear from people who've turned off their heating, ration their hot water, and avoid charging essential mobility devices, yet still feel like they're fighting a losing battle with their energy bills. It's vital that changes to standing charges avoid driving up bills for low-income households who have higher energy needs."

Martin Lewis, founder of MoneySavingExpert.com, said the best option would be to slash standing charges within the price cap but this would require Government support for vulnerable high-energy users.

He said: "Standing charges are a £338-a-year poll tax on energy bills, a moral hazard disincentivising lower users from cutting their bills. They also punish customers who only use gas for central heating in winter, many of whom are elderly, by making them pay for every day in summer. It's by far the biggest single subject of complaint I get from the public about energy bills.

"The problem with presenting a choice of price caps is many vulnerable people won’t make that choice. So I will be making representation to Ofgem to ensure firms are mandated to default lower-use price cap customers on to the no standing charge tariff – or at least do that for those on the Priority Services Register."

Richard Neudegg, director of regulation at Uswitch.com, said: "The promise of more zero or low standing charge tariffs options by next winter could help bring more choice to the market and might be a good choice for some lower-consumption households. But consumers must beware that the trade-off for lower standing charges will be higher unit rates, so comparing options will be important."

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