Francesca Smith, Research Assistant, Money and Mental Health Policy Institute

The government must act to protect people from looming energy price hikes this spring

24 February 2023

As the price of energy has soared, many of us have spent time worrying about how to afford to keep our homes warm. But for the one in four of us with mental health problems, this worry can be compounded. Symptoms of mental health problems, such as low mood and problems concentrating, can make it even harder to budget, manage spending and figure out where to cut back on already tight budgets. This can lead to anxiety, rumination and fear over future energy prices hikes.

We’re concerned that those of us with mental health problems will be disproportionately affected by the sudden loss of energy bill support facing consumers this spring. As come April, the Energy Price Guarantee (EPG) is scheduled to hike from £2,500 to £3,000 and the Energy Bills Support Scheme will come to an end. 

That’s why, along with more than 70 organisations, we’ve pledged our support to our founder and chair, Martin Lewis, who wrote to the Chancellor urging him to keep the EPG and postpone the increase. This is vital in preventing the harm that a further price rise would cause to the mental health and finances of consumers across the country. But as the cost of living crisis shows no signs of abating, the government must go further beyond delaying the change to the EPG.

Existing support does not go far enough

The Energy Bills Support Scheme introduced in October last year – designed to soften the blow of astronomical price increases – provides all households with a £400 non-repayable energy bill discount. While this additional support is welcome, our findings from a recent Research Community survey indicate that, for those with mental health problems on the sharp end of the crisis, this does not go far enough. We heard that for people experiencing the combination of mental health problems, high energy bills and persistently lower average incomes, this government intervention is barely making a dent.

“The entire energy/cost of living crisis is affecting my mental health and increasing my stress and anxiety as I do not know how I am going to be able to pay my bills once winter kicks in – I have not yet turned on my heating – just wearing more clothes in the house.” Expert by experience

When people are unable to afford their bills, they can fall behind on payments, accrue debts and arrears, and in the extreme may self-disconnect from their energy supply. This sentiment is reflected in recent figures from Citizens Advice, which estimate that 3.2 million people were impacted by energy disconnection due to difficulties topping up their prepayment metres last year. 

Our survey suggests that people with experience of mental health problems are overrepresented among those at risk of disconnection. Almost two in ten (18%) Research Community respondents reported that they use a traditional or smart prepayment meter to pay for their energy. As prepayment meters can be a more expensive way of paying for energy – and households using this method are already more likely to be experiencing financial hardship – this is extremely concerning.

“I… find having prepayment smart meters extremely detrimental to my mental health. I have had to unplug the smart monitor as it was increasing my anxiety. I have had to switch my boiler off for the winter as it was eating £20 in gas daily. Not having basic needs like heating and hot water is causing dampness in the house and also affecting my mental health.” Expert by experience

A cliff edge in support for millions

The end of the support scheme will mean that only those receiving disability or means-tested benefits, or of pension age will be eligible for government help – cutting millions of people off from vital financial assistance. The proposed changes to the EPG in April will also mean households can expect to see a further price rise, with another 43% total increase to their energy bill. The simultaneous timing is deeply worrying – and represents a cliff edge in energy bill support for those who fall through the gaps in the government’s safety net.

“I really don’t know what our payments are likely to be over the coming months – that doesn’t help stress levels at a time when finances are getting tighter.” Expert by experience

Moving forward

There is an urgent need for a broader support package that reflects the deep and pervasive impacts of the crisis, and the toll it’s taking on people with mental health problems. To better support those who narrowly miss out on means-tested support, and whose incomes fall short of affording sky-high energy bills, the government should:

  • Urgently postpone the increase in the Energy Price Guarantee set to occur on April 1st
  • Offer financial assistance to an expanded range of people, including those who do not qualify for means-tested support but are at risk of disconnection or falling behind on energy payments.

People experiencing both mental health problems and financial difficulty are among the hardest hit by the cost of living crisis. More must be done to shield them from the looming cliff edge in energy bill support, and the potential psychological and financial harm it will cause.