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British Gas to donate 10% of profits to struggling customers

British Gas’ owner, Centrica has confirmed extra support will begin in autumn and last for the “duration of the energy crisis.”

From 12th September British Gas’ owner, Centrica confirmed that that it will open an Individual & Families fund and is designed to help customers with an energy grant of between £250 and £750.

The decision came following increasing pressure on companies and business to support households this winter. With rising energy prices predicted to push fifty per cent of households into fuel poverty, the Government has been working with energy companies to offer more support.

Following the UK Government’s announcement of the Energy Bills Support Scheme (EBSS), giving millions of households a £400 discount, the Chancellor and Prime Minister organised an emergency meeting with companies to find solutions.

Individual and Families Fund

British Gas has said that you do not even need to be a British Gas customer to apply. Their £25 million support package comprises of:

  • £18 million, or 10 per cent of all profits donated to the British Gas Energy Trust to award fuel grants to eligible customers and the organisations the Trust supports to provide money and energy advice to people in financial hardship.
  • An immediate £12 million donation will boost the fund – this is double the previous contribution and more than 10 percent of first half pre-tax profits
  • £1 million provided to the British Gas Energy Trust to fund 20 additional advice centres and money advisors to provide more help in communities to those struggling with living costs.
  • £6 million previously donated to British Gas Energy Trust to award fuel grants to British Gas customers and money advice to all energy customers
  • Grants are expected to average £750 per household supported and go to thousands of customers most in need
  • On top of this compared to other energy suppliers, British Gas’ contribution to the Warm Home Discounts scheme is the largest, at over £40m.

British Gas described the move as the largest support package an energy supplier has ever donated to customers.

Chief Executive of Centrica, parent company of British Gas Energy, Chris O’Shea said: “The current cost of living crisis requires all of us to think differently. As a responsible business we want to do more to support our customers during this difficult time. Committing ten per cent of our profits for the duration of the energy crisis will mean we can target help at those who need it the most. This increased investment in supporting our customers adds to the financial support and advice we already offer and ensures more grants will be available as we go into this winter.

“We’re proud to have put together a £25+ million customer support package which will grow: so far, we’ve donated £18 million to the British Gas Energy Support Fund; we contribute £6 million annually to the British Gas Energy Trust for all consumers; and an additional £2 million investment was made through the British Gas Energy Trust to fund another 20 money advice centres.”

Helping the most vulnerable

British Gas is increasing its support for customers in advance of a rise in energy tariffs expected to be announced by Ofgem. British Gas will contribute 10 percent of energy supply profits to the British Gas Energy Support Fund for the duration of the energy crisis, backdated to the start of 2022. This will help the most financially vulnerable customers who are struggling to pay their bills this winter.

Centrica was keen to highlight that the initial contribution will be £12 million which is higher than 10 per cent of profits. This is double the previous contribution and makes this the biggest voluntary aid package offered by a UK energy supplier to its customer. This takes the total amount contributed to the British Gas Energy Support Fund to £18 million over the last 8 months.

With pre-tax profits of £98 million in the first half of 2022 for British Gas Energy, the initial contribution of 10 per cent would be £9.8 million. However, the company has increased this to £12 million to ensure there is more available this winter.

Long history of providing support

In a statement for the company, Centrica said it has a long history of supporting customers in several ways financially and providing advice on how to make their homes more energy efficient to manage their bills.

Every year the British Gas Energy Trust, an independent charity solely funded by British Gas, delivers advice and support services for all UK energy consumers and last year provided £1.8 million of debt relief, emergency fuel vouchers, and grants to replace boilers, with a further £3.6 million of funding provided to other organisations who offer advice and financial support. 

As well as the annual funding of £6 million, an additional £2 million investment with the British Gas Energy Trust was made this year to fund 20 more money advice centres. These advice centres provide each visitor with an average of an £950 added to their yearly income – improving their finances in the longer term.

CEO of British Gas Energy Trust, Jessica Taplin said: “We’re delighted to receive this financial boost from British Gas which will enable us to support tens of thousands of households in need this winter and beyond. 

“As a charitable trust we’re helping thousands of people every month who are struggling with bills including energy costs – we know that many people in debt feel they have nowhere else to turn. But help is often available – whether it’s through grants or through charities who provide money and energy advice. 

“Advisors listen and support with household budgets and energy efficiency, they can help people access support such as unclaimed benefits as well as managing debt – this huge amount of new funding will help us to support tens of thousands more households at risk and in fuel poverty.”

British Gas supporting customers
British Gas has asked customers to visit their website mid-September for more details

Final thought

This is going to be a tough winter for people who will have to make a choice between heating and eating.

Most people cannot remember a time when the economy faced such a difficult environment. Energy companies, such as British Gas have come under increasing pressure to help people more because of spiralling profits caused by increasing energy prices.

The Government has been keen to act but has been unable to do so during the ongoing Conservative leadership race. There are now several questions that remain for British Gas and their parent company, Centrica. Does Whitehall think the support offered today goes far enough? Will calls for a further windfall tax dampen because of the support package?

Clearly Centrica knows which way the wind is blowing and they hope that a slice of their profits will be enough to stop a windfall tax stripping them of further profits.

Elected in a matter of days, the new Prime Minister will have to weigh up this package – and hopefully more to come, following today’s announcement – and decide whether additional support is necessary. And, crucially where that money is going to come from?

Find out about the fund

British Gas customers have been asked to visit their website for more information mid-September: https://www.britishgas.co.uk/

Photo Credit: James Riden

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