A leading money switching service has spoken out following the government's new plan to knock hundreds of pounds off energy bills for homeowners. .
On May 26, the Chancellor of the Exchequer, Rishi Sunak, announced that the government would be scrapping the plan in favour of a new scheme. According to the gov.uk website, "Millions of households across the UK will benefit from a new £15 billion package of targeted government support to help with the rising cost of living."
The previous plan had aimed to reduce consumers bills by up to £200 from October, with a repayment deal lasting up to five years, but the new plan has a more ambitious target.
Justina Miltienyte, head of policy at comparison site Uswitch.com, said: “Households are feeling the turbulence of a stormy energy market, and the prospect of a £2,800 price cap now looms on the horizon. These latest Government measures have been a long time coming and will go some way towards helping customers weather the storm."
She believes that the Chancellor now recognises that many households are struggling, and added: “The substantial action suggests that the Government finally appreciates the unprecedented scale of the help needed, following Ofgem’s prediction that the number of households in fuel poverty could double to 12 million."
Around eight million of the most vulnerable households across the UK will receive support of at least £1,200 this year, including a new one-off £650 cost of living payment. As the October discount on energy bills is doubled, universal support will increase to £400, and consumers will no longer have to repay it over five years.
Justina Miltienyte said: “Doubling the bill rebate to £400 is a sensible step, and it is good news that it will not have to be repaid. This measure will give some welcome relief to customers and reduce the impact of soaring bills, especially for those on the brink of financial hardship.
“We have long called for an increase in support for the vulnerable who will be worst hit by the energy price hikes. So the one-off £650 payment to the eight million people with the lowest incomes is to be applauded, as is the £300 for pensioners and £150 for those receiving disability support."
However, Justina Miltienyte remains sceptical and is waiting to see whether the government turn their words into actions.
She said: “The devil is in the details though and we still don’t know how the payments will be distributed. We will be watching to see how the Government implements these proposals and ensures help actually reaches all those that need it.”
