Backbilling is causing distress among energy customers, with many facing unexpected charges despite regulations aimed to protect them. The discussion reveals the emotional and financial toll of these practices. The Lifetime ISA is under scrutiny, particularly its effectiveness for first-time homebuyers in a soaring property market. With water bills set to rise steeply, the financial strain on households is highlighted. Additionally, the impact of Storm Éowyn on power outages in Northern Ireland raises concerns about compensation and support for affected residents.
The backbilling issue remains a significant challenge for consumers, as many face difficulties contesting unjust energy bills despite Ofgem regulations against the practice.
The Lifetime ISA's unchanged property price cap since 2017 raises concerns about its relevance for potential homebuyers in high-cost areas like London.
Deep dives
Backbilling Issues and Consumer Rights
Backbilling occurs when energy suppliers charge customers for energy usage beyond 12 months prior, which is against Ofgem regulations. A recent case highlighted the struggles of a consumer who received a surprise energy bill of nearly £6,000 for gas and electricity usage from two and a half years ago. Despite the clear violation, many customers face significant hurdles in contesting such bills, often having to navigate multiple customer service interactions before achieving cancellation. This situation raises concerns for vulnerable individuals who may not be able to challenge unjust bills effectively.
Lifetime ISAs and Housing Affordability
Lifetime ISAs (LISAs) are designed to assist individuals under 40 in saving for first home deposits, supplemented by a 25% government bonus. However, a recent discussion revealed that the £450,000 property price cap has remained unchanged since 2017, making it increasingly difficult for buyers in high-cost areas like London. Examples from listeners demonstrate that the cap is often insufficient to cover average home prices, leading to frustrations about potential penalties when withdrawing funds improperly. Critics argue for a review of this cap to align it with the significant growth in housing prices over the years.
Rising Water Bills and Economic Impact
Starting April, water bills in England and Wales are set to increase by over 25%, raising concerns about affordability amid rising living costs for many households. This steep increase is attributed to significant investments in water infrastructure and support for low-income families, designed to address water supply issues and sewage pollution. However, consumer advocates warn that these hikes may push more households into financial distress, emphasizing the importance of contacting suppliers for available support like social tariffs. Recommendations for consumers include evaluating whether a water meter might reduce their bills, as some suppliers will provide tailored solutions based on individual circumstances.
Thousands of people have made complaints to the Energy Ombudsman related to so-called back billing, which is when customers are sent new bills for energy use longer than 12 months prior. The practice was banned by the regulator Ofgem in 2018 but is still causing consumers problems. In the cases investigated by Money Box customers had to complain multiple times before their suppliers recognised they'd broken these rules and cancelled the bills. Ofgem says it's committed to reviewing billing practices while the trade industry body Energy UK says suppliers are continuously working to improve practices.
Is the Lifetime ISA fit for purpose in 2025? That's the question being asked as Parliament's Treasury Committee calls for evidence about whether it is still an appropriate financial product nine years after it was created. We'll discuss how it works successfully for some, but also the problems some people face.
The price people in England and Wales pay for water and sewage services will rise sharply from 1st April. Figures announced this week revealed that households in England and Wales will pay on average £123 a year more for their water. What can you do if you're worried about affording your bills?
And thousands of people in Northern Ireland are still without power after Storm Éowyn last week - what help is available?
Presenter: Paul Lewis
Reporters: Dan Whitworth and Eimear Devlin
Researcher: Jo Krasner
Editor: Jess Quayle
(First broadcast 12pm Saturday 1st February 2025)
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