Energy Credit and Bereavement Support

This BBC podcast is supported by ads outside the UK. Because Vivint adjusts your thermostat when it knows you're out, it's a smarter way to save. When Vivint guards your packages from Prowlers, it's a smarter way to protect. And when you can lock the doors and dim the lights for movie night with a single tap,

Well, that's a smarter way to live. To get the smarter home system that just gets you, go to Vivint.com or call 1-855-4-VIVINT. Live intelligently. Get that Amex gold card ready. I'm way too tired to cook tonight. You read my mind. With the gold card, we can get up to $120 a year in statement credits. Are you feeling the Cheesecake Factory? Five Guys? Either of those sound good? Yes. Which one? Both.

Pay with the gold card to receive up to $10 a month in statement credits at participating partners. Uncover more ways to reward yourself at AmericanExpress.com slash Explore-Gold. Enrollment required. Terms apply. BBC Sounds. Music, radio, podcasts.

Hello, welcome to this Moneybox podcast. From October the 1st, the price cap on mains, electricity and gas bills in Britain falls by around 7%, but some people won't pay less. Thousands of people have still not claimed new backdated bereavement benefits for unmarried parents whose partner died. And if you've started a side hustle or earned over £50,000 in the last 18 months, you may need to tell the revenue. by Thursday.

But first, Moneybox has discovered that energy companies are holding on to more than £8 billion of their customers' money as credit on their accounts. The figure from the regulator Ofgem is the total amount of credit being held in the first three months of... this year. Dan Whitworth's got the figure and has the details done.

Well, as you said, Paul, that £8.1 billion figure comes direct from the energy regulator Ofgem, covers the first three months of this year. But it's important to put in context. For one thing, there are tens of millions of domestic energy accounts across Britain.

And secondly, Ofgem was unable to break down that number between households and businesses, although it did tell us it expects a majority of that credit to be from households. And why are the energy companies hanging on to so much of people's money?

We don't know, is the short answer, Paul, but energy companies holding on to people's money can be a good thing. It's a useful way of budgeting. So if you pay by direct debit monthly, it's how the system is designed to work. You pay more in the summer. When your actual bills are smaller and you build up that credit, then you spend that credit in the winter when your bills are bigger, but you stay paying the same monthly amount. But...

And this is the big but. The system is designed to work so that over a 12-month period, that credit roughly balances out, meaning you'd expect that credit balance to be at least close to £0 around April or May time. Now, that's when the industry calls the end of usage season. It's when you stop using your energy as much. Now, this 8.1 billion figure is the first three months of the year. Well, that suggests that's not likely to be happening.

And it's more than four times the amount of debt that suppliers were owed by customers in the same period. And what have the energy companies had to say about this, Dan? Well, Energy UK speaks for suppliers. It told us at the time this £8.1 billion was being held, as credit prices were extremely volatile and the level of government help was unknown, it also said it's not meaningful. to compare credit and debt. But Dan, don't people have the right to get that credit back if they ask?

They do. And the rules from regulator Ofgem are really clear on this. Credit is customers' money. It's that simple. And they can ask for it back any time they like. And if they do, it has to be refunded in a, quote, timely fashion. Now, this time of year... When winter is just around the corner, not necessarily the time people might want to do that. It's good to have credit at this time of year.

But come April and May next year, it's something customers should keep an eye on. But the whole reason, Paul, we started looking into this story was because we've been hearing from listeners struggling to get their money back. It's certainly what happened to Dan Malcolm and his young family. done firmly they don't they don't want to give it back it's disgusting sure it was 1100 pound in credit and i said look they like to leave a month

Vance for them, which is like, that's fine, but I want £800 back. So you weren't even asking to get all your money back? No, it was £800 I wanted back, and I thought that was fair, and they still made me jump through hoops to get it. It is disgusting. It was so, so frustrating.

And I know the folk on the end of the floor are there to help, but they weren't helping. They're reading from a script and I was getting so infuriated from it, but it was so hard not to get really right of them on the phone. Three hours of my time was wasted on the phone, listening to the silly theme tunes, waiting, and to get told, I'll get back in touch with you, or it's getting sorted today, or we'll get processed. No, it didn't.

really drove me bananas. So everybody's saying, energy companies say, it's your money, you can get back when you want. It's lies. Now, it's important to say Dan did eventually get his money back, but it took him six weeks and hours of his time spent on multiple phone calls. Now, if people aren't happy about how they're being dealt with on this issue, they can complain to their supplier in the first instance.

If after eight weeks they're still not happy, well then they can go to the Energy Ombudsman. Now that's independent of the suppliers and they can then take a look. Thanks, Dan. Well, listening to all that is Angus McNeill, MP. He's chair of the House of Commons Energy Security Committee. And Angus McNeill, what's your response to that figure at Moneybox Uncovered? £8.1 billion of customers' money being held by... companies in the first three months of this year.

It certainly raises eyebrows and is very concerning indeed because it means four to four and a half times the debt that we hear that consumers are in since last winter. It's a 1.8 billion energy debt. It beggars belief that it's as high as it is. And when you hear of customers like the gentleman there in Den Ferman with £1,100, for some people that wouldn't be far off their annual bill, or at least it was a couple of years ago.

And if you're in credit somewhere near your annual bill, then something is very wrong. And if this is writ large across consumers, across the UK, then the energy companies have got a tidy wee nest egg sitting there with customers' money. They certainly have. And I must say, Angus, we trailed this story this morning and we've heard from dozens of listeners this morning. Nicola, Michael, Judy owed nearly £3,000. Debbie, Tracy owed £2,000. Steve owed £1,700.

the supplier is still charging him for what he uses and they're still coming in I can watch them as I'm talking to you it seems the suppliers are not following the rules to send back credit if you ask in what Ofgem calls a timely fashion Yeah, in a timely fashion of eight weeks or three hours on the phone. When you're on these phone lines and they're reading a script to you, certainly I could identify with the gentleman there and he's...

his blood pressure and trying to keep his cool. But, you know, I think Ofgem have to look at this and have to. perhaps put in a ceiling of a fraction of your annual bill that can be the maximum held in credit because, you know, as is rightly pointed out, the credit is a good thing in a way in that it can even the bills over the year.

But if credit has been taken alone off, to pardon the pun, if people are going too far with it, if energy companies are taking people's money, then they're making that money work, you would imagine.

And it's not fair that people are without their own money over the period of a year. And that should be balancing out. And I think Ofgem have a job here to make sure it is balancing out. And then probably... to think of ceilings of credit as a fraction of the bill or as a percentage of the bill that energy companies are allowed to take because if it's building up to points approaching the annual bill or greater and you're paying monthly direct debits on top of that.

And there's a problem, very obviously. Yes, and do you think the energy companies should also inform people and manage credit balances better? I mean, Dan Malcolm told us that he didn't even know he had £1,100 until he decided to look one day.

Yeah, absolutely. It's very opaque and it requires people to have the time and the determination to take three hours because you might even have the time, but you actually need both together, time and determination. And then, of course, to go to an energy ombudsman. wait eight weeks and basically people are busy in life and probably I hope this isn't the case I hope energy companies aren't doing this but it looks concerning

But people have got a lot going on in their lives. And to manage their energy debt and to keep on top of the energy company who are employed and are working at this full time isn't something that everybody can do. And we have to be grateful to some of the listeners and yourselves at Moneybox.

for taking the time to go and research and to look through all of this. And now you've heard this and you've heard the problems, and as I say, more emails are coming in already. Mike said his uncle's owed £2,000 and he's been trying to get it for... two months to get it back. And now you've heard all this, is it something your committee might call on Ofgem or the suppliers to get in front of you and tell you what they're doing about it?

Yeah, absolutely. I mean, it's something that will be in correspondence with Ofgem about, I would imagine, very promptly. And I think that suppliers can take it as a warning shot at the moment that... The House had better be in order, because as chairman of the Energy Security and Net Zero Committee, and I'm sure the members of the committee, our ears are definitely pricked up to this problem now, and we'll be on to it.

Angus McNeill, MP, thanks. And if you're affected by this issue, do email moneybox at bbc.co.uk. I wrote that earlier and since then we've had so many coming in. So thank you for those, but still keep sending them.

Thousands of unmarried parents whose partner died before February this year have not claimed a benefit they are now entitled to. Since February, cohabiting parents whose partner dies can claim bereavement benefits for them and their children equally with married or civil partnered parents. And those whose partner died before the law change can claim payments backdated for many years. years even if they weren't.

married or civil partnered. That's potentially thousands of pounds. But figures provided to Moneybox under Freedom of Information show that there have been just 4,700 claims for backdated benefits, and that's less than a quarter. Of the 21,000 people, the Child Bereavement Network estimates should be eligible.

Three years ago, Laura's partner of 10 years died unexpectedly, leaving her to raise their young son on her own without the benefits a married woman would have been paid. Now she's claimed the new benefit backdated to the time her partner died. The process itself was relatively painless. It's a 10 minutes on the internet.

You can do it really quickly. And it was processed relatively quickly for me. It's made my life just that little bit easier. I'm not, you know, as we come into winter, I'm not thinking, oh gosh, I don't put the heating on, things like that. You know, and a lot of people are...

facing these crises and it's particularly hard when you are a lone parent family if you just found yourself in that or you know you have found yourself in that retrospectively this is this is based on your national insurance contributions So this is money that you are entitled to. This is support that you are entitled to. You paid for. And I really want to emphasize that because some people feel very strongly like, oh, I don't I don't feel I should be entitled to it. You absolutely should.

That was single parent Laura. Well, listening to that is Vicky Anning from Widowed and Young, a charity for people 50 and under when their partner died. Vicky Anning, just remind us first who is eligible for these backdated payments. Hi, Paul. So yes, there are two different benefits. There is first of all, the widowed parents allowance. And so anybody who

whose partner died between as far back as 2001 and April 2017 could potentially be eligible for back payments. And then there's the bereavement support payment, which is payable potentially to people whose partner died. after the 6th of April 2017, which is the case for Laura. So there's a bit of a complication in that the criteria for eligibility is...

the 30th of August 2018. So you need to have been claiming or eligible for child benefit on that date to be eligible for a back payment. Yeah so that's the eligibility date but as you say it is confusing because because your partner can have died long before that. And if you had been eligible, then you would still be getting it. So those are the people. And as I said earlier, 21,000 could be eligible for this. Just to be clear, though, it's only unmarried parents, isn't it?

under 66 as well people who get child benefit childless unmarried people can't claim if they don't have well the ones who don't have children At the moment, that is the case. Yes, that's true. Now, the Department for Work and Pensions wouldn't give us an estimate of how many people could be entitled to backdated bereavement payments. But as I said, the widely accepted figure of 21,000, nearly...

5,000 have claimed it. That leaves 16,000 people who haven't. Does that surprise you? Absolutely. It's very disappointing that so few people have so far put in a successful claim. Obviously, we're calling on the government to do everything in their power to get the word out to as many people as possible before the...

cutoff date, the deadline, which is actually set for the 9th of February 2024. So the clock is counting down to that date. And we're calling on everyone to help get the word out to families. who could have been widowed as long ago as 2001 and may not realise that they're potentially eligible for payments.

Yes, the Department of Work and Pensions did tell us it's trying to find these people using what it calls stakeholders, charities and a targeted media and social media campaign. Is that working? Well, we've been working with the bereavement sector, across the bereavement sector and with the DWP to try and get the word out to as many people as we can, but we believe that more could be done. to reach out to as many people as possible. It's hard to reach out to people that...

as we say, you know, have been bereaved as long ago as 20 years ago, who may not realise that this eligibility criteria has changed. So we're calling on everyone to help us to get the word out to as many people as possible they may have. friends or neighbours, family members who whose partner died up to 20 years ago. And we're running a social media campaign under the hashtag Find the 21K. Find the 21,000. And you mentioned the deadline. You have to claim before the night.

February so you have to claim by the 8th don't you next year would you like that extended? Well, I think that would be very helpful that we think that the deadline is quite arbitrary. And we think that people need that time to make their claims. And it would be absolutely heartbreaking to think of a family who made a claim.

find out about it on the 9th or 10th of February next year and couldn't put in a back payment claim as a result of that. And very briefly, Vicky, what should people do? Where's the best place to go for information? So they can go to gov.uk and type in bereavement support. And then we've also got a lot of frequently asked questions on Wayweddon and Young's website.

And also on the Childhood Bereavement UK website. And it's really important that people do check their individual circumstances before putting in a claim. Thank you very much. And that's childhoodbereavementnetwork.org.uk and widowedandyoung.org.uk. Vicki Anning from Widowed and Young, thanks very much. Now...

There's another important deadline coming up. It's a self-assessment tax deadline. And it's on Thursday. And don't think just because you don't do self-assessment, it doesn't apply to you. It might. You may have to register for the first time. Sarah Cole. is head of personal finance at Hargreaves Lansdowne. She explains what you need to know.

If you need to do a tax return for the first time this year, you have to register by the 5th of October. So that applies to income you had in the tax year running from April 2022 to April 2023. And it's worth knowing this because if you miss the deadline, there could be a penalty.

Anyone who started working for themselves is going to need to register, as will hire. So that's anyone making over £100,000. But there are other reasons why you might need to do this. So I'll touch on some of the common ones. But if you're in any doubt at all, it really is worth checking on the gov.uk website.

So if you're a high rate taxpayer who pays into a personal pension, you're going to need to do a tax return. You might also need to do one if you're in a workplace pension, but this really depends on the type of scheme itself. So the easiest thing to do is just ask your employer. If you get child benefit and you or your partner earn over £50,000, you might need to do a tax return to pay the high income child benefit tax charge. And that involves paying some of this benefit back.

You might also need to do one if you have a side hustle. So you have £1,000 trading allowance, which can cover things like selling through eBay. But if you make any more than this, you would normally need to do a tax return. Plus, you might need one if you rent a room out in your home and make more than the £7,000. £3,500 rent-a-room limit. If you make any more than this, you need to register for self-assessment.

And breathe. Sarah Coles there. That deadline again, Thursday, October the 5th, this Thursday. Any questions, check gov.uk and search self-assessment and look at who must send a tax return. It really could be you.

Back now though to energy bills because from this weekend the price cap on mains, gas and electricity bills in England, Scotland and Wales will fall by around 7%. It means a typical household will pay at the rate of £1,923 a year.

if they have both fuels and pay by direct debit in the run-up to Christmas. Now, that's just an average over the whole year. How much you pay in those three months will depend how much you use. Despite the fall, many people could end up paying more than they did a year ago.

That's partly because energy bill support, which paid £400 to every domestic customer last winter, won't be replaced. And also because standing charges, the daily fee just to stay connected to mains electricity or gas, have... risen over the last 12 months by an average of 11% and more for people on prepayment meters or who just have electricity. From October, it will cost customers with both fuels between £25 and £30 a month before their use.

a single unit of energy. Our reporter Dan Whitworth spoke to these people in Dunfermline about their energy bills. Very hard last winter. It went up maybe 50% of the... You're busy every month with your heating and lighting. And what are your hopes or, I suppose, fears possibly for this coming winter? Well, the hopes are that things are getting better, but it doesn't seem like that.

Obviously, like everybody else, they went up massively and this year we've been... extra careful i think like everybody else they're you know trying to make sure that they're not overspending it's not so bad it's it's okay even though we got some subsidy, I call it subsidy at some point. You got the help from the government, £400, everybody got it. Exactly, yeah, but it was quite helpful for the period. What about this winter coming? I do hope that the government will come around this period.

because there is inflation everywhere, but there is no increase in salary or wages. So I do hope that the government will come around this time and put another subsidy here. which was excellent we're currently sitting in credit we're now going on to another tariff so we're now having to increase what we're paying and the credit will disappear over the winter not looking forward to winter at all

Dan speaking to people in Dunfermline. Listening to that is Ellen Fraser, an energy consultant and partner at Beringa. Ellen Fraser fears in Dunfermline, I'm sure, in most of the country about costs this year. The new price cap is down 7%. but how does it compare to the last winter and previous winters?

Yeah, it's a good question. If we look at last winter specifically, if we actually look at the underlying energy cost, it was actually over £4,000 per customer. Now, exactly as you mentioned there, there was the energy bill support scheme, which paid £400. over the winter period for customers. But actually in addition to that, government actually capped.

with the energy price guarantee at £2,500. So that brought energy prices down quite significantly and that meant that households were paying something around £2,100. If you look at the winter before, however, it was round about £1,000. So that's already a massive increase. And what we're seeing this winter is it's almost holding at the same level as it was last winter. And that's difficult because...

Household buffers have been burnt down so much given the broader cost of living crisis that people really don't have savings to eat into. No, and we heard on Friday from an analyst, Cornwall Insight, that they expect the price cap to rise slightly in January, about 3.5%. But over the whole of 2024, it will average about the same as we're paying from... the first of October. So do we just have to get used to paying that much?

Certainly our expectation at Beringa is exactly that, that really this is almost the new norm and we see that almost playing out into 2025. To be honest, it's hard to forecast beyond that because you're really in crystal ball territory in terms of... what's happening with global demand, what's happening with Ukraine war, etc. But I think that is right. And people now need to start getting used to budgeting in a different way for their energy bill than they were two years ago.

And what about that £400? Because that's not happening again this year. That's going to be quite a blow to people. They got those cheques for £66, £67 a month, or credits, I should say. They got used to that in the winter. That's exactly right. At the same time...

It was actually quite an expensive solution for government, and it was done very quickly when the costs really started to escalate significantly. But it was given to everybody, and whether you had a second home or everything, it was a significant effect.

pay out from government what we're now seeing is that obviously government is trying to cut back but we would really plead to government to think quite hard about putting some level of support in for the most vulnerable customers who simply have to make

quite brutal choices around whether they can heat their home this winter. They need some level of support, otherwise we start to face into some real health issues. Yes, and the Department for Energy told us that three million people on low incomes and hard-to-heat homes can get the warm home discount.

of £150 off one bill, though working-age people do have to apply for it. There may be other help out there, but let me ask you about standing charges briefly. I mean, now, as I said, it's over £30 a month for people on prepayment metres. with gas and electricity. They've risen by, in that case, about 15-16% since last year. Why are they going up?

Ultimately, the standing charges are representative of the cost of running the network, if you like. So there's a huge amount of cost associated with moving gas and electricity around the UK to get that into the customers' homes. And there are some other charges as well that are wrapped into that standing charge. Ofgem will look at that fairly regularly to see if there is any other mechanism to actually play those costs back into customers.

And it's almost seen as being the least worst option. But if you're a low consumer of energy and you try really hard not to use much, having that fixed connection charge is really, really expensive. So, you know, we would, again, we would come back. to some level of subsidy and a plea to government to look for additional support. Yes, and briefly, in a word really, Ellen, should people do a metre reading this weekend before prices change? Absolutely, do them regularly.

Ellen Fraser of Boringa, thank you. And electricity and gas prices in Northern Ireland are regulated differently. On Wednesday, Felicity Hanna's here with a look at how people are planning to reduce energy bills this winter. Are you worried about turning the heating on again? What have you done to save energy?

Comments, questions, moneybooks at bbc.co.uk. Leave a number if you can. She'd love to hear from you. And I have to say, I've seldom seen so many emails coming in as about energy. They're popping in every moment. Well, the price of the Moneybox podcast is not being cut. It's still zero. And who's shouting you get what you pay for? Stop it now. If you listen today, but...

Still don't subscribe? It's about time you did. And tell your friends to push us up even further in the top 25 podcasts. It's easy and free on BBC Sounds. And you get Felicity Hanna with Moneybox Live thrown in. In nearly all our podcasts, we hear from a listener or two, usually because they emailed us with their issue. So do email yours to moneybox at bbc.co.uk. We do read them all and it could be you.

In this podcast, the reporter was Dan Whitworth. Researchers Sandra Hardiel and Luke Smithhurst. Studio manager Jack McKinnell. Our editor is Jess Quayle. I'm Paul Lewis and this was a BBC News Money and Work production for... BBC Sounds and now the unforgiving truth in your DNA. Have you ever wondered who you really are? It clicked in my mind suddenly. I was like, why have I never done this? I'm Jenny Kleeman.

a writer and journalist. In my new series, The Gift, from BBC Radio 4, I've been uncovering extraordinary truths that emerge when people take at-home DNA tests. He said, what do you know? You don't even know that your father's black. So I'm like, Jeff, we got him. And he's like, what are you talking about? And I go, we got him. Obviously, it was completely unintended consequence of a gift.

Join me as I investigate what happens when genealogy, technology and identity collide. Listen to The Gift on BBC Sounds.