Households face energy ‘crunch point’ as support tapers from April, MPs told

Households are heading for a “crunch point” in April as energy bill support is set to fade away and the moratorium on force-fitting prepayment meters ends, MPs have been told.

Citizens Advice said households are going to come under increased pressure, although it noted bills will rise during the summer when energy use is lower.

It comes as household bills are set to soar by around £500 on average, hitting £3,000 for the typical home.

Bills are currently set at £2,500 for the average home – and households have also been getting vouchers for £400 spread over six months.

Meanwhile, energy suppliers have been banned from installing prepayment energy meters under warrant after concerns about their behaviour were raised. But that ban will come to an end in a little over a month.

Andy Manning, principal economic regulation specialist at Citizens Advice, said: “We’ve got the moratorium on forced installations of prepayment meters at the moment, but that’s due to expire at the end of March. The end of March is also when the support schemes fall away, so it seems there’s a real crunch point when we get to April 1.”

Speaking to MPs on the Public Accounts Committee, he said the situation is “of concern”.

Meanwhile, Kate Nichols of trade body UK Hospitality, said many businesses are going to go insolvent from the start of April because support on their energy bills will be slashed.

“You’re seeing energy costs going at around 15% of total turnover, so without that support you’re into business viability,” she told MPs.

“When we see the tapering of support in April – notwithstanding the fact that we understand why that is happening – there is going to be a knock-on effect on business insolvency.”

She said the Government is focused on mitigating insolvencies of energy suppliers and household debt, but there is not “as big a focus” on business insolvency in some sectors.