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Why have energy prices shot up and what help is out there?

All of us will have seen reports about rising energy prices and suppliers going bust. We’ll also be wondering if our own bills are ever going to stop going up

But why has this crisis happened?

It’s because demand for energy suddenly surged as countries around the world got back to full speed after the Covid slowdown.

At the same time, supplies of energy have been lower than usual and there has been pressure on what’s left in storage.

The war in Ukraine is putting even more pressure on that gas because previously, lots of our gas used to be piped in from Russia.

Gas is also used to produce about 40 per cent of our electricity in the UK, which is why bills are rising for both energy sources.

To top it all off, the energy price guarantee will rise again after June 2023. The price guarantee, which came into force in September 2022, is the maximum price suppliers can charge us per unit of energy on a standard tariff.

It limits the cost per unit of energy, meaning the bill for a typical home is £2,500.

But remember, the energy price guarantee is NOT a cap on bills.

It means the normal Quids in! advice to switch suppliers to get the best deal doesn’t apply for now. Even the big firms for the most part can no longer give us deals that beat the price guarantee. So sitting on the standard tariff is the least bad option for now.

There’s help out there

The first place to turn if we’re struggling with energy bills is our supplier. They have to help us find a way we can pay what we owe.

It’s important to make contact – if we don’t try to work out an arrangement with our supplier, they may threaten to cut us off.

And there’s is other help, including:

Warm Home Discount Scheme – £150 off our electricity bill or a £150 prepayment meter voucher. We could qualify if we get the guarantee part of Pension Credit or are on a low income. One thing to be aware of – if we switched supplier after applying to the scheme, it’s up to our new supplier to decide whether we qualify.

Winter Fuel Payment – a one-off sum to help us pay for heating over winter for those of us born on or before 26 September 1956.

Cold Weather Payments – these are paid to us automatically if we get Universal Credit, Pension Credit, Income Support, Income-based Jobseeker’s Allowance or Income-based Employment and Support Allowance. In Scotland, we get a one-off payment regardless of temperatures. In other areas we’ll receive the payment when the temperature in our area drops to freezing or below for seven days in a row.

Photo: Andres Ayrton / Pexels

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