Energy price cap raise sparks fears for Warm Home Discount Scheme | Personal Finance | Finance
Ofgem is expected to raise the energy price cap this Friday which, according to expert analysis, could result in more than 11 million Britons payins £112 more a year for their gas and electricity. According to analysis from the End Fuel Poverty Coalition, the typical dual-fuel charge could surge to £1,250 per year as a result of the increase.
Jo Allen, an expert on customer experience management in the utility sector at Pegasystems, warned an increase may mean poorer, vulnerable customers will suffer and slip into fuel poverty.
Ms Allen detailed it may raise the question of how it could be alleviated, which includes discussions around social tariff proposals and changes to the WHD scheme.
Ms Allen said: “A social tariff may be a helpful solution, but the challenge will be identifying vulnerable customers.
“From my own experience working inside a provider, the problem is always having to ask the customer whether they were vulnerable or not.
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Ms Allen continued: “But there are other tools that could be applied to help. There is a current consultation on the Warm Home Discount which is being made more widely available, again this risks not getting help out to vulnerable customers most efficiently.
“Potentially high duplication of effort and costs across so many providers is unhelpful when the goal is to get the most benefit to the neediest. There has to be a simpler, less complex solution.
“What is needed is a radical rethink about how the Government and the industry coordinate on WHD.
“If the scheme is to be more widely applied, it would make greater sense to centralise the whole process, reducing complexity, saving time, and ensuring the WHD delivers the positive effects intended.”
The WHD scheme allows eligible claimants to get £140 off their electricity bill for the 2021 to 2022 winter.
The scheme itself opens up on October 18, 2021 and the money itself is not paid to claimants, it will be applied as a one-off discount on an electricity bill between October and March.
Additionally, it may be possible to get the discount on a gas bill instead of an electricity bill and claimants will need to contact their supplier for more details.
There are two ways to qualify for the HMD scheme:
- Claimants get the Guarantee Credit element of Pension Credit – known as the “core group”
- Claimants are on a low income and meet their energy supplier’s criteria for the scheme – known as the “broader group”
Those who qualify under Pension Credit rules will be eligible for the discount if on July 4, 2021 all of the following applied:
- Their energy supplier is part of the scheme
- Their name (or their partner’s) is on the bill
- They or their partner are getting the Guarantee Credit element of Pension Credit (even if they get Savings Credit as well)
Eligible recipients will get a letter between October and December 2021 telling them how to get the discount if they qualify.
The letter will detail if the recipient needs to call a helpline by February 28, 2022 to confirm their details.
So long as the recipient is eligible, their electricity supplier will apply the discount to their bill by March 31, 2022.