Energy price cap increase could raise bills by £558 for the least energy-efficient homes
HOUSEHOLDS who live in some of the least energy-efficient homes are at risk of seeing their bill rise by up to £558, a report has found.
The new energy price cap was announced yesterday, with energy regulator Ofgem confirming that bills are set to rise this winter.
The cap will rise from the current rate of £1,568 a year to £1,717.
It means the average household paying by direct debt for dual fuel will see their annual bill go up by £149, or around £12 a month – a 10% increase.
But homes across Britain with the poorest insulation and energy performance will see bills rise even greater than this.
Energy Performance Certificates (EPCs) tell you how energy efficient a building is, with A being the most efficient and G being the most inefficient.
However, at least 18 million homes have an Energy Performance Rating of D or below, according to study by Rightmove that was first published in the Daily Mail.
Someone living in a home with an EPC rating of A could see their average annual bill increase by £56 once the price cap changes.
However, a home with the a ‘D’ rating could see their average annual bill rise by £225 once the change comes into place.
Someone with an ‘E’ can expect a £319 increase, while homes with an ‘F’ rating could expect a £445 rise.
Meanwhile, homes with the worst rating of ‘G’ could see their average annual energy bill increase by £558 when the change takes place.
If your home has a low EPC rating the most obvious way to cut costs is by making green improvements such as installing solar panels or heat pumps.
But these are costly measures and not in every households budget.
The government also runs a number of schemes which help low income households get access to new boilers and heat pumps.
You can read more about that here.
The news comes as many households are concerned about rising bills ahead of the winter months.
The government also slashed the amount of people who can claim the Winter Fuel Payment.
Now only those on Pension Credit, or other means-tested benefits, will qualify for up to £300 in energy bill help starting this year.
When does the price cap change?
OFGEM reviews the cap on unit rates for those on the default tariff every three months.
This means the energy price cap can move up or down at four different points in the year.
Price cap rates are updated on the following dates:
- January 1
- April 1
- July 1
- October 1
Support with your energy bills this winter
There are still a number of benefits available to struggling households this winter.
Pension Credit – £3,900
This benefit gives you extra money to help with your living costs if you’re over the state pension age and on a low income.
Pension Credit can also help with housing costs such as ground rent or service charges.
This is a separate to your state pension and you can qualify for the scheme even if you have other income, savings or own your own home.
The support also opens up eligibility for social tariffs, the Warm Home Discount, cheaper broadband, free TV licenses, lower water bills and the Winter Fuel Payment.
When applying, you must flag if you are single or living with a partner.
You’ll be eligible if either:
- You and your partner have both reached State Pension age
- One of you is getting Housing Benefit for people over State Pension age
Pension Credit tops up your weekly income to £218.15 if you are single or to £332.95 if you have a partner.
You could get an extra £81.50 a week if you have a disability or claim any of the following:
- Attendance Allowance
- The middle or highest rate from the care component of Disability Living Allowance (DLA)
- the daily living component of Personal Independence Payment (PIP)
- Armed Forces Independence Payment
- The daily living component of Adult Disability Payment (ADP) at the standard or enhanced rate.
You can apply for Pension Credit online, over the phone or by post.
You can start your application up to 4 months before you reach State Pension age.
You can apply any time after you reach State Pension age but your application can only be backdated by 3 months.
This means you can get up to 3 months of Pension Credit in your first payment if you were eligible during that time.
Warm home discount scheme – £150
The Warm Home Discount scheme is paid to millions of low-income households each winter to help with increased heating costs.
Households in England and Wales don’t have to apply to get the cash and receive it automatically.
However, some Scottish households do have to apply for the discount.
Eligible households get £150 credited to their electricity bill between October and March 2024.
To qualify you’ll usually need to be actively claiming one of a number of means-tested benefits during the qualifying week – which is usally in August.
However, if you later launch a successful claim for backdated benefits, you may still be able to qualify after this date and once it’s confirmed.
Last week the government confirmed to The Sun that it is committed to retaining the £150 Warm Home Discount.
Energy grants – £100’s
Many of the UK’s biggest energy suppliers have grants in place to help support struggling customers.
But eligibility criteria varies depending on the supplier and the amount you can get depends on your financial circumstances.
The country’s biggest supplier British Gas previously had energy grant scheme in place, with the hardest pressed households receiving a grant of up to £2,000.
The firm also has also launched a debt reduction scheme called ‘You Pay: We Pay’.
Struggling customers will also be able to get part of their debts wiped via what’s known as debt matching.
For instance, if a customer pays £100, British Gas will pay off £100, too, effectively wiping half the amount owed and getting them back on track sooner.
The £15 million “You Pay: We Pay” scheme opened in June and eligible customers have been contacted directly.
Elsewhere, fellow supplier EDF has a customer support fund which on average wipes £1,250 off customers’ bills.
It is available to vulnerable customers experiencing hardship.
To apply you must visit EDF’s website and make sure you have details of your account number (find it on your energy bills or EDF emails) and the current debt balance on all EDF accounts you have.
Check directly with your supplier to see what help is available.
Household Support Fund (HSF) – up to £600
Struggling households can apply for support via the Household Support Fund (HSF).
The scheme, which is funded by the Department for Work and Pensions, was first launched in 2021 but has been extended a number of times.
Funding is given to local councils to distribute, so the amount handed out varies across the country.
But in the past some families have had up to £600 help.
How much you can get also depends on where you live, but the sum should be paid as a direct bank transfer or on receipt of an electricity bill.
Check in with your local council if you would like to see if you are eligible to receive the fund.
Free electrics and gadgets – £10s
Octopus Energy is handing out freebies such as electric blankets as part of its Octo Assist fund.
Analysis by the firm shows that customers with electric blankets saw a 20% fall in their gas bill, while only increasing their electricity usage by 0.2% – adding up to an average saving of £150 across winter.
The energy firm, which serves six million customers, is also loaning thousands of thermal imaging cameras to customers so that they can find spots in their homes where heat was escaping.
Once those draughts are identified, people can then look into ways to get them fixed and thus reduce their energy usage.
Free insulation’s or boilers – £1,000’s
Low income households may qualify for major discounts on installing boilers or insulating their homes.
For example, the Energy Company Obligation, set up by Government, lets households on certain benefits apply to have energy-saving measures installed in their homes.
It might mean cavity wall or loft insulation, or maybe even a new boiler fitted, sometimes for free.
To qualify you usually need to be on one of the following benefits
- Pension Guarantee Credit
- Income-related Employment and Support Allowance (ESA)
- Income-based Jobseeker’s Allowance (JSA)
- Income Support
- Tax Credits (Child Tax Credits and Working Tax Credits)
- Universal Credit
- Housing Benefit
- Pension Credit Saving Credit
Households’ needs are assessed on a case-by-case basis, so there’s no guarantee you’ll get help, but it is worth looking into.
Prepayment meter vouchers and credit – £50
You can get temporary credit from your supplier, but you will have to pay this back.
In many cases suppliers offer around £10 to £20 if you run out and can’t top up straight away to ensure that you don’t go without heat or lights.
Beware that when you do top up, this amount will be deducted.
You may also be able to get a fuel voucher through a little-known scheme.
This is a code given to you in a letter, text message or email which you can use to add credit to your gas card or electricity key.
Exactly how much it is can vary, but in many cases it’s £49, and you won’t have to pay it back.
If you get a fuel voucher, don’t forget that when you top up, come of the credit will go towards paying off any debt, for example emergency credit.
If you haven’t topped up for a period of time, you may also owe standing charges, a daily flat fee for energy use that is separate to your usage.
Contact your local council, food bank or Citizens Advice to find out more.