Households will “not be able to cope” amid rising energy and living costs this winter, a charity has warned.
Adam Scorer, chief executive of fuel poverty charity National Energy Action, has raised concerns about consumers as energy companies fold, prices rise and universal credit is reduced.
The charity boss told BBC Radio 4’s Today programme those being transferred to new suppliers after their original energy provider had exited the market would “almost certainly” be switched to a tariff that is “much more expensive and will be more expensive too when the price cap goes up”.
Mr Scorer said: “There are four million households in fuel poverty in the UK, these price rises may put another 500,000 on that.
“They live on a knife-edge every winter. This winter is going to be even more extreme, many of them will see incomes go down because of Universal Credit and food inflation and price rises will come up, and for some, it will be [intolerable] and they will not be able to cope.”
In recent days several energy firms have ceased trading as a result of being priced out of the market due to a surge in wholesale gas prices.
The closures have affected around 1.5 million customers.
Consumers whose energy suppliers collapse are automatically switched to an alternative provider by energy regulator Ofgem.
But while this protects them from being left without fuel, it does not safeguard them against an increase in energy bills.
Mr Scorer defined fuel poverty as a household that has to spend more than 10 per cent of its income to be able to afford a decent level of warmth.
In response to a question about the prospect of the energy price cap rising next year at the next review, Mr Scorer said: “The wholesale spikes we’ve seen over the past months have not been reflected in the rise that comes on 1 October. They will be carried over unless there is a miracle into the next price rise in April.
“People are going to go into the winter dreading it, not sure how to make their current budget work and expecting it to get even worse.”
Peter Smith, director of policy and advocacy at National Energy Action, has said the poorest households will find it “particularly difficult to keep warm this winter”.
Writing on the charity’s website, he said: “The UK Government and Ofgem’s key urgent priority should be to ensure vulnerable households are protected when their supplier fails.”
The Joseph Rowntree Foundation has warned that the rising cost of living may mean low-income families need to find an additional £710 per year to cover their costs.
The Government has said the energy price cap will protect consumers facing rising energy bills.
Business Secretary Kwasi Kwarteng said in a statement delivered to Parliament: “Ofgem and government have clear, well-rehearsed processes in place to make sure that all customers are supplied with energy.
“Our approach will be informed by the following principles: protecting customers, especially vulnerable ones, from price spikes.”Internet Explorer Channel Network