Protesters storm Scottish Power headquarters over energy prices
Ofgem raised its price cap on energy bills, or the maximum amount energy suppliers can charge each year, in April by 54 percent to £1,971. From October, the UK’s energy price cap, set by Ofgem, will rise every three months.
However, forecasters warned October 1 will see a rise of up to 82 percent, which could see average annual bills hit £3,582.
As a result of the massive increase, Don’t Pay UK has set up a campaign to get one million Britons to refuse to pay their energy bills.
Organised by volunteers and funded by donations, Don’t Pay UK has collected nearly 108,000 pledges from people to cancel their automatic payments if Ofgem lifts the price cap and raises rates this fall.
On Twitter, account The New Moderates issued a new warning to Ofgem about the growing campaign to boycott bills.
They said: “Ofgem should immediately smash the energy price rise and force the energy companies to take on the cost.
“If they can’t do that, then the energy companies must be nationalised to stop this national emergency getting even worse.”
Ofgem was warned it must not raise the price cap or else Britons will boycott bills
The New Moderates issued a warning to Ofgem about the growing campaign to boycott bills
Don’t Pay UK, which launched in June this year, said its campaign had reached “millions of people” and the support received so far “demonstrates the anger and frustration at a broken energy system that needs to be drastically transformed for the interests of people”.
It said: “In just a few weeks, over 100,000 of us from across the country have come together to say we will refuse to be pushed into fuel poverty and we no longer want to pay for the profits of the energy companies.”
“We are building the biggest mass non-payment campaign since the Poll Tax and we are showing the powers that be that our collective power will force an end to this crisis.”
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Don’t Pay UK has collected nearly 108,000 pledges to cancel automatic payments
Investec forecasts the fixed price energy cap will increase to £3,523 on October 1
Brean Horne, a personal finance expert at comparison site NerdWallet, has warned Britons against cancelling their energy bill payments in comments to Express.co.uk.
He said: “With energy prices expected to soar to £3,359 a year for the average household in the next six months, many will risk falling into financial difficulty which may lead to problem debt if they don’t have savings to fall back on.
“While the government plans to offer a £400 energy bill discount this winter, it doesn’t go nearly far enough to cover the staggering increases that many households face.
“Although some consumers may be tempted, to follow The Don’t Pay UK movement, there may be dire long-term consequences.
“Suppliers usually charge a customers are likely to face a non-payment fee. Energy customers face additional fees if they avoid paying their monthly direct debit.
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Cornwall Insights is forecasting £4,266 for January and £4,426 from April
“While direct debit tends to be the cheapest and most convenient way to pay for gas and electricity, your supplier is likely to send you bills at a much higher rate if you cancel, which will be added to the arrears.
“If you have arrears and do not arrange to start paying back what is owed, your supplier can begin the process of moving you over to a prepayment meter.
“Missed payments and defaults on an energy bill can also cause harm to your credit score, in a similar way to missing a payment for a loan or credit card.
“Having a poor credit score can make securing finance from a lender much more difficult because it indicates you may struggle to pay back what you borrow based on your payment history.
“Those who are already struggling to keep up with their energy payments – or believe they will – can seek help from Citizens Advice for impartial advice and guidance. Homeowners may also be able to take advantage of certain benefits, grants and help offered by the government and energy suppliers.”
Brean Horne said ‘customers face additional fees if they avoid paying’
It comes as Investec forecasts the cap will increase from its current level of £1,971 per year for the average household to £3,523 on October 1, an increase of 79 percent, while Cornwall Insights suggests £3,582.
The cap is expected to increase again on January 1 and then even further on April 1, although forecasts beyond this year remain subject to significant uncertainty.
On August 4, Investec forecast an increase in the cap to £4,210 on January 1.
By August 9, Cornwall Insights was forecasting £4,266 for January and £4,426 from April.
By August 10, Auxilione was putting the January price cap at £4,467 and its forecast for April reached £5,038.