Will the government help struggling households as bills soar?

As more and more people fall behind on their energy and water bills, the government is facing growing pressure to step in and help.

Figures from Citizens Advice show that 15% of households - more than four million - owe money to their energy supplier.

That’s 70% higher than it was in January 2022.

Similarly, one in eight households are behind on their water bill - an increase of almost 50% in the last four years.

Government urged to offer 'lifeline' to households

Citizens Advice has now called on the government to take steps to protect households most at risk, such as:

• making sure the Crisis and Resilience Fund can deliver support to those who need it quickly
• making sure additional help can be given through the benefit system if needed
• reforming the warm home discount to better target those in the greatest need
• delivering the debt relief scheme

“Too many households simply cannot make ends meet each month,” said Dame Clare Moriarty, chief executive of Citizens Advice.

“And further bill rises could increase the pressure.

“The government must also bring in targeted help for those who need it most. 

“Without this, another wave of the cost-of-living crisis will wash away households already on the brink. 

“There is still time to act - but those struggling need a lifeline now.”

How much will energy bills go up by?

The current energy price cap will remain in place until the end of June, so there’s certainty over bills for the next few months at least.

But energy costs are likely to be much higher from July onwards.

Cornwall Insight estimates that in July, a typical gas and electricity bill will reach £1,850 a year from July.

That’s an increase of nearly 13% - or more than £200.

Iran war pushing up energy prices

The surge is being blamed on the US-Israel war with Iran, which has led to the closure of the Strait of Hormuz.

Around one-fifth of the world’s oil supply passes through the Strait - making it one of the most important shipping routes in the world.

So the closure has led to oil prices soaring, and that's having a knock-on effect on the cost of energy, food and petrol, as well as global supply chains.

And even if the US and Israel reach a deal with Iran tomorrow, that doesn’t mean the economic and infrastructure damage will be instantly undone.

“A summer rise will be painful for households,” said Dr Craig Lowrey, principal consultant at Cornwall Insight.

“But the bigger concern is October when household demand traditionally picks up. 

“If the cap stays at a similar level as July, that is when the government will need to think seriously about targeted support for the most vulnerable.”

What’s already being done to help with bills?

After the Iran war began, the government quickly announced £53m in support to help vulnerable households struggling with rising heating oil costs.

And various green levies that we pay through our energy bills were scrapped last month, which ministers believe will take an average of £150 off the costs of household energy bills.

No details on a larger support scheme have yet been put forward, but ministers have already hinted that if one is introduced, it’ll be based on people’s household income, rather than available to everyone.

Rest assured that we’ll be keeping a close eye on this and here to let you know the details as soon as anything is announced.

What can I do now if I’m worried about my energy bills?

If you’re already struggling with your energy bills and worried about further increases, there are steps you can take straight away.

Speak to your energy supplier

Let your supplier know if you’re starting to fall behind with your payments and worried about how to pay your next bill.

They might be able to offer:

• grants
• payment plans
• advice on managing your account

Join the Priority Services Register

If you're vulnerable, perhaps due to age, disability or health conditions, it could be worth joining the free Priority Services Register (PSR).

The PSR is a free service that provides extra support to people who need help with their energy supply. 

By joining, you could benefit from additional help during power cuts or assistance with making your billing more understandable.

Check to see if you can sign up at PSR.

Try to save energy and water

Small steps such as only using your washing machine when you’ve got a full load and taking shorter showers can make a big difference to your bills.

We’ve put together a list of 50 smart energy-saving tips to help you get started, as well as ideas on how you can cut your water consumption.

Create a household budget

Energy and water are just some of the costs that come with running a household.

So make sure you know exactly how much money you’ve got coming in each month and where it’s going, so you can prioritise your spending and identify possible savings.

We’ve put together a guide to creating a budget to help you get started.

Find out what support you can get

You might be entitled to financial support from the government, so use our benefits calculator to find out what you could get.

It might be more than you realise.

Get help with your debts

If you’re feeling the pressure of debt, contact us for confidential, practical and impartial debt advice.