By October, up to 40% of UK E.On customers could be in fuel poverty after stark warnings from boss Michael Lewis. The energy firm has reached out to the UK government to step up its support for struggling homes due to the current energy crisis.
Currently, we are in unprecedented times according to the energy supplier, with increased numbers of customers going into arrears with their energy. As it stands, one in eight E.On customers are struggling to pay their bills.
If you add in the new energy price cap and colder winter months coming ahead, these numbers are expected to rise dramatically, forcing many households to make drastic decisions.
E.On aren’t the only energy firm that has expressed its concerns about the current crisis and asking for substantial interventions to be made by the government.
In recent weeks, Scottish Power boss, Keith Anderson issued a harsh warning that there could be millions of customers all across the UK facing a winter crisis unless there is an intervention.
With rising numbers of customers likely to be unable to pay their bills, it could result in even more energy suppliers collapsing, creating more panic and chaos in the energy market.
What Is Fuel Poverty?
Fuel poverty is described as households that have to spend 10% or more of their disposable income on energy.
There has never been a more important time for UK homeowners to understand how much energy they are using, as well as the best ways to reduce energy usage. Therefore, by using the simplest, free electricity usage calculator, anyone can see how much energy is being used, as well as if you can save money. No matter if you’re a homeowner or business owner, this tool is for you.
In April this year, the price cap was lifted by Ofgem, adding an additional £700 on top of the average household energy bill, with the total cost being £1,971. To combat this, there are calls for the government to levy a windfall tax on oil and gas firms.
What Is A Windfall Tax?
A windfall tax is a tax that is imposed by a government. It is a one-off tax that is placed on a single company or group of companies. The reason why there have been suggestions for a one-off tax in the energy industry is due to Shell and BP reporting huge profit increases while oil and gas prices skyrocket worldwide.
The idea of a windfall tax is to target specific companies that have been lucky to benefit from something they were not responsible for. Compared to last year, energy giants such as Shell and BP are earning much more money.
Multiple factors have led to these profits, such as Russia’s invasion of Ukraine, an increase in demand and the world emerging from the pandemic. Other nations such as Greece and Spain have already issued windfall taxes on energy companies.
Just this year, Shell has seen record £7bn profits, with BP making their highest profits for 10 years at £5bn.