Preparing for the energy price rise – and other big changes

You’ll have heard a lot in the news about the crisis in the energy market, and the price cap going up at the end of this month. It’s a worry – especially when so many other things are on the horizon that could impact our finances, like the planned cut to Universal Credit and the end of the furlough scheme. We’ve put together some advice on handling all of these, plus any other financial shocks that might come your way.

Energy prices

The price cap on default and standard energy tariffs changes every October and April. At the beginning of this coming October, it is going up 12%, to £1,277 per year for a ‘typical’ user. (That’s not to say you will pay exactly £1,277 per year – it’s based on usage, so the more you use, the more you’ll pay.) And it’s expected to go up again in April next year.

We recommend using a price comparison site to look for the best possible deal. But the best deal for you depends on what you’re looking for. Would you prefer lower prices right now (with a risk that they might go up by a lot in April) or a more expensive fixed tariff where the price is locked in for one or two years?

If you’re on a fixed tariff right now that is cheaper than the new price cap (check any letters you have from your energy supplier, or give them a call), you will probably save money by staying on it as long as you can. However, you will be moved to the price cap if your energy supplier goes bust, as some of them are.

 

If you find yourself really struggling with the cost of energy, and are worried that you might not be able to afford your bill (or may have to cut back on other essential spending) here’s what to do:

• Contact your energy supplier. They may have payment options or grant schemes available to help you, and prepayment customers may be able to access emergency credit.
• If you’re one of our Debt Management Plan, IVA, Trust Deed or DAS customers, let us know you’re struggling so we can help you go through your budget.
• Our advisers can also use a benefits calculator to assess whether you’re entitled to any financial support, such as Winter Fuel Payments or the Warm Home Discount – or you can use one of these calculators yourself on the government’s website.

And of course, it’s always a good idea to check you’re saving energy wherever you can. Visit the Energy Saving Trust website for ideas.

 

When furlough ends

If you’re currently furloughed and concerned about what will happen to your income when the Job Retention Scheme comes to an end, you can find everything you need to know in our latest furlough update.

 

If your income goes down

Whether you’re affected by the Universal Credit cut or you lose income for another reason (like the National Insurance rise coming next year!), if it leaves you struggling to cope there are three things you should do:

• If you’re one of our IVA, Debt Management Plan, Trust Deed or DAS customers: let us know. We’ll look at your budget and see how we can help.
• Use a benefits calculator to check if you’re entitled to anything else.
• Check out pages 6-7 of our Debt Action Plan for tips on increasing your income and cutting your spending.

 

If you’re worried about being evicted

During the pandemic, landlords were required to give an extended period of notice to their tenants before taking court action to repossess their properties. This has now come to an end in England (click the links for advice if you live in Wales, Scotland or Northern Ireland where the rules are a little different).

If you’re in arrears on your rent:

• As above, if you’re one of our customers, please let us know.
• You should also get specialist housing advice: take a look at Shelter’s website and give them a call if your situation is urgent.

 

Whatever the situation, it’s never hopeless – the important things to do are to be prepared and to ask for help if you need it.