Cost of living: help with energy bills

Cost of living: help with energy bills

By Nic Hopkirk

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With the energy price cap set to rise to £3,240 in October, we look at the help available if you’re worried about getting into ‘energy debt’ and the steps you can take to lower your energy bills.

In October this year, the energy price cap is set to rise from £1,971 to £3,240 a year, with a further rise predicted for January 2023.

Rising energy prices are concerning for every household, but are especially worrying for those on lower incomes.

If it is possible, it’s a good idea to put savings aside now to cope with rising bills, or to consider overpaying into your gas and electricity account through the summer so that it’s in credit when the cap rise kicks in.

But for many that’s simply not an option. 

If you’re concerned about getting into energy debt, there is help available.

And there are things you can do at home to help to reduce your energy consumption.

Why is energy getting so expensive?

In what some analysts are calling a perfect storm, several factors have come together to push up energy prices.

The most recent is the war in the Ukraine. 

Russia is the world's largest exporter of oil to global markets and the second largest crude oil exporter behind Saudi Arabia.

After Russia invaded the Ukraine in February, the UK, EU and US placed restrictions on oil and gas imports from there.

But even before that, prices were already increasing.

A cold winter in 2021 across Europe and a hot summer in Asia, where gas is used to power air conditioning, put pressure on supplies. 

As a result, stored gas levels were already much lower than normal.

All of this has come together to mean demand for gas and oil is now outstripping supply on a global scale.

Our fuel and energy suppliers are having to pay a lot more for oil and gas, and that cost is now being passed on to us consumers.

What help is available for paying energy bills?

If you're worried about being able to afford your gas and electricity bills in October, these are the steps you can take and the help that's available.

1: Contact your supplier

Whether you’re on a monthly tariff or a pre-pay meter, the first thing you should do if you’re struggling to pay your bills is to contact your supplier.

The energy regulator Ofgem has rules in place stating that your supplier must help you if you’re falling behind on your energy bills.

They should help you to work out an affordable payment plan that is manageable for you.

It’s rare for suppliers to disconnect customers. They’re more likely to fit a prepayment meter in your home, but will usually only do this if they've explored all other payment recovery options with you first.

Citizen's Advice: what to do if you've been told that your energy supply will be disconnected

2. Find out if you qualify for an energy scheme or grant

Some major suppliers are offering grants to those struggling with energy debt.

British Gas is offering grants of up to £1,500 for individuals and families in energy debt, no matter who your supplier is. You'll need to meet certain criteria to qualify.

Find out more at the British Gas Energy Trust

The following companies are also offering financial support through grants. Again, you'll need to meet certain criteria to qualify for the funds. 

3: How the government is offering financial support

£400 credited to your energy bills

In May this year, Rishi Sunak announced that every household in Britain would see £400 cut from their energy bills.

You do not need to apply or sign up for anything – your energy supplier will simply credit the £400 to your account.

Low-income households to receive £800

Low-income households, pensioners and people with disabilities are set to receive up to £800 of additional support.

Around 8 million households on the lowest incomes will receive a one-off Cost of Living Payment of £650.

The money will be given in two payments, the first from this month and the second in the autumn. 

It will be sent straight to the bank accounts of people on means-tested benefits without the need to claim it.

Households will also benefit from the previously announced £150 council tax rebate for homes in England that sit within bands A to D.

Pensioners to receive £300

Pensioners are set to receive a one-off Pensioner Cost of Living Payment of £300.

The cash will help more than eight million households who receive the Winter Fuel Payment.

They will receive the money in the autumn.

People with disabilities to receive £150

An estimated 6 million people who receive means-tested disability benefits will be given a one-off Disability Cost of Living Payment of £150 in September.

Many of these people will also receive the £650 Cost of Living Payment for low-income households, bringing the total value of support to £800.

To help people who do not fall into the above categories, the government is also putting an extra £500 million into the Household Support Fund from October.

What is the Household Support Fund?

The government’s Household Support Fund is a £1.5bn pot which councils can access to support their most vulnerable residents.

The fund enables local councils to distribute payments in the form of small grants to help towards the cost of food, energy and water bills, as well as general living costs to support those most in need.

The fund is available until March 2023.

Find the contact details for your local council

4. The warm home energy discount scheme

The Warm Home Discount Scheme (WHD) is a government-led scheme offering a one-off payment of £150 (inclusive of VAT) towards energy costs. 

The scheme was introduced by the Government in April 2011 to help customers most in need. 

It's a £150 rebate applied to your electricity or gas bill between October and March. If you're on a prepay meter, you'll usually be sent a top-up voucher. 

Find out more information about the Warm Home Discount Scheme

Who can I call for support?

Fuel poverty and energy efficiency charity National Energy Action (the NEA) offers support and guidance for those experiencing fuel poverty.

It offers a free support service known as WASH (Warm and Safe Homes). 

You can call them on 0800 304 7159, or fill in an online form for help.

A man boiling a kettle in a kitchen

What can I do to lower my energy bills?

If you’re looking for ways to reduce your energy bills, there are small things you can do at home that will help to save money on gas and electricity.

1: Turn your thermostat one degree lower

Turning your thermostat down by one degree will help to save around 4% on your energy bills.

Also, it’s best to only have the heating on when you need it, rather than keeping it constantly on low, as it works out cheaper.

2: Change all of your light bulbs to energy saving bulbs

Doing this could reduce your lighting energy consumption by up to 90%.

And turning the lights off when you leave a room will work out cheaper than leaving them on.

3: Turn off your appliances from standby mode

Doing this could save the average family £55 a year in electricity, according to the Energy Saving Trust.

4: Draught-proof windows and doors

Filling cracks in floors and skirting boards and using a draught-excluder in front of your front and back doors could help to save up to £45 a year.

5: Do your washing on a 30-degree cycle

Washing at a lower temperature could save up to £28 a year, according to the Energy Saving Trust, while reducing your washes by one cycle a week will add further savings.

6: Swap the tumble dryer for a clothes rack

Or hang the washing outside on warmer days. Doing this could save £60 a year.

7: Have showers instead of baths

And keep showers shorter if you can. Keeping your shower time to four minutes could save up to £70 a year, while having showers instead of baths could save another £12.

8: Find out if you qualify for a grant to make your home more energy efficient

Energy companies will pay for insulation, glazing and even new boilers for people claiming certain benefits under the Energy Company Obligation scheme.

While the Boiler Upgrade Scheme offers property owners £5,000 towards the cost of buying and installing an air source heat pump or biomass boiler.

Grants averaging £10,000 are available to certain households to make energy efficiency improvements under the Green Homes Grant Local Authority Delivery Scheme.

Find out more in Free money to make your home more energy efficient

Check if you’re on the cheapest possible tariff for you at USwitch