Scottish households that earn around the average income are likely facing fuel poverty this Winter according to Scottish Power Chief Executive Keith Anderson…

This comes as another blow to families already finding the increasing cost of living and energy crisis difficult to deal with.

Scottish Households left Vulnerable

The Scottish Power Chief Executive, Keith Anderson, has said that families would find it extremely difficult as fuel prices are set to rise again. He believes that without government intervention this Winter will be a truly horrific one – pushing for a £1,000 reduction in energy bills for UK households.

He had this to say –

“The average wage in Scotland is somewhere between £31,000 and £32,000. If the energy price goes to £2,900, that means every person on an average salary will be defined as being in fuel poverty… That is a horrific statistic and that shows you this isn’t an issue that is just affecting poor people, it’s not an issue just affecting people on benefits… This issue will hurt and be extremely difficult for people on an average salary.”

Understandably, if the fuel price cap is again increased in October there are fears that many customers will simply be unable to pay their bills. Inevitably this will lead to huge losses for suppliers. Although, according to Keith Anderson, the biggest concern is people on pre-payment meters – citing the UK government’s plan to give each household £200 towards energy bills as insufficient. It is worth note that this sum will need to be paid back.

“We need to be realistic about the gravity of the situation – around 40% of UK households, potentially 10 million homes, could be in fuel poverty this winter.”

The rising of the energy price cap in April has led to a massive increase in fuel bills for UK customers. For 18 million homes on standard tariffs this is roughly a £693 increase and for those on prepayment plans, it’s about £708.

Tariff Reductions

UK energy companies have battled against rising wholesale prices (the prices suppliers pay for energy) that have been affected by the war in Ukraine. Mr Anderson believes that an alternative approach could be taken – suggesting a £10bn tariff-reduction fund that could be paid for by adding £40 a year to household energy bills for the next ten years. It is hoped that this would tackle the biggest cost-of-living crisis in a way that other measures are not capable of, with households on pre-payment meters and those receiving benefits also being eligible for the discount.

What is fuel poverty?

Anybody who spends 10% of their household income or more on heating their home (after tax and housing costs have been deducted) is considered to be in Fuel Poverty in Scotland. This also applies if their remaining income is insufficient to maintain an acceptable standard of living, currently defined as being at least 90% of the UK Minimum Income Standard. The SNP government has committed to reduce fuel poverty to no more than 5% of households by 2040.

A pressing need for action

Keith Anderson states that the scheme must be decided on now and in place by October if it is to be truly effective for safeguarding.

“When you get to October, the weather starts to get colder, the usage will increase dramatically.”

Any intervention has a pressing need to be decided on by July, worried that more energy companies could collapse in customers were left unable to pay their bills. Although Scottish power is owned by the Spanish firm Iberdrola, there are fears that foreign energy suppliers (including Eon and EDF) may struggle to persuade their parent companies to continue subsidising their subsidiaries running at losses.

Customer Billing – Will I Be Affected?

       As already mentioned, energy costs are spiralling – and the price rises are affecting all of us. For UK energy customers it is difficult to say how your bills will be affected due to the serious volatility in the energy markets. It is important to remember that energy prices as a whole are rising, and this will be passed onto consumers through energy bills, making it something to keep a close eye on.        

 Different suppliers will feel the pinch in different ways so it is crucial to be aware of the current situation your energy supplier finds themselves in. It is possible to view up to date supplier profiles with any recent changes for all of the energy suppliers in the UK, here.     

   At a time where bills look set to rise due to market volatility, it is also a good idea to ensure that you are not being overcharged for any of your utilities. It can be a tricky task to navigate but there are free online tools to remove the hassle available.     

 You can find a free online Gas Bill Calculator to see if you are being overcharged, here.       

You can find a free online Electricity Bill Calculator to see if you are being overcharged, here.       

    Energy Solutions by Us, for You        

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      Keeping up to date with developing situations and the associated ramifications is a tricky and time-consuming job. It is also one that is not likely a priority for you and your business.      

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