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The most vulnerable at biggest risk from fallout of war in Ukraine, fuel poverty charity warns

March 10, 2022

The most vulnerable at biggest risk from fallout of war in Ukraine, fuel poverty charity warns Featured Image

Energy costs for customers with prepayment meters could peak at £428 a month by January 2023, as the war in Ukraine continues to push gas and oil prices up, national fuel poverty charity Fuel Bank Foundation has warned.

Customers who pay by direct debit also face payments of up to £250 per month, an increase of more than £144 on current costs.

In February, energy regulator Ofgem announced its steepest ever increase to the price cap level, which will rise from £1,277 to £1,971 per year for customers who pay by direct debit and from £1,309 to £2,017 per year for households that pay as they go with a prepayment meter, from 1st April.

Energy industry analysts were already predicting the price cap will increase further still in October, rising to £2,247 per year for customers who pay by direct debit and £2,299 per year for prepayment customers. At this level, prepayment customers would need to top up their meters with £321 by January 2023 to ensure they have the energy they need during the month.

But following Russia’s invasion of Ukraine and the ensuing volatility in the energy markets, Fuel Bank Foundation predicts that fuel costs will rise even further than previously forecast. (Fig 1).

Before war in Ukraine broke out the future already looked bleak for millions of households in the UK struggling with the cost-of-living crisis and soaring energy bills. As a result of the ongoing conflict between Russia and Ukraine and the impact this is having on surging gas and oil prices, we have revised our forecast and unfortunately the figures are even more shocking.
Matthew Cole, Fuel Bank Foundation

Matthew Cole continued, “Those who prepay for gas and/or electricity, often the most vulnerable in society, stand to be the biggest losers, with a projected peak monthly cost of £428. At these levels, the harsh reality is that by next winter, many families will be forced to live in extreme fuel poverty, without heat, hot water or a hot meal.”

Fuel Bank Foundation is calling on the Government to do more to help vulnerable customers who can’t afford to heat their homes, in the wake of rising energy costs.

Mr Cole said the £150 council tax rebate and the £200 energy bill loan to be repaid over five years, announced by the Chancellor last month, was insufficient and too broad brush, and more targeted financial support was needed to ensure it reached the right people.

We know higher energy prices are coming later in the year. Urgent consideration needs to be given by the government to extending financial support to those who need it most. For example, people who are eligible for the Warm Home Discount would be a good place to start.
Matthew Cole, Fuel Bank Foundation

“Financial support must also be meaningful and cover the monthly uplift families will face. An annual £150 WHD payment will not mitigate the significant monthly increases that families already defined as struggling will face in a few short months. To put this into context, if annual fuel bills reach £3,000, which they realistically could, the WHD payment would need to be around £2,000 to have any sort of financial benefit.

“The government needs to act now to protect the most vulnerable ahead of the significant price hikes at the end of the year and start of 2023. Failure to do so will result in a catastrophic fuel poverty crisis.”

Read Fuel Bank Foundation's 'Fuel Crisis Report' below