The UK’s Energy Bill Crisis
What can I do to save money on my energy bills?
The number one issue on many people’s minds at the moment is how to deal with the growing cost of living pressures that millions of households are facing. The global gas prices are at record levels which has meant that it is more expensive for energy suppliers to buy the gas and electricity we use every day and so energy bills are rising. As we know, Covid-19 has already caused people to see a big jump in their gas and electricity bills on top of rising food prices. Therefore, we have had to become more vigilant in how we can save money where we can during this crisis.
Millions of people have been pushed into poverty during the energy crisis which has led to an increase in bills for around 22 million households which can rise again from 1 April 2022. Currently, millions of people have their energy bills capped at £1,277 for an average household, but Ofgem will announce what the increase will be from April, with estimates that it will rise by up to £700. This means that the average annual dual fuel energy bill can rise to £1,925, a 50% jump.
The Government is being urged to step in to help struggling households as the consequences of this rise could mean people falling into debt or limiting their use of heating. Therefore, this can seriously affect those who live in conditions with damp and mould leading to not only financial hardship but ill health due to intolerable living conditions.
What will The Energy Bills Rebate do?
The Energy Bills Rebate will provide around 28 million households with an upfront discount on their bills worth £200. Energy suppliers will apply the discount to domestic electricity customers from October, with the Government meeting the costs. This discount will then be automatically recovered from people’s bills in equal £40 instalments over the next five years. This will begin from 2023, when global wholesale gas prices are expected to come down.
What are the Government doing to help?
- Many households will receive £350 of government support to help protect them from rising energy costs.
- All domestic electricity customers will get £200 off their energy bills from October, with 80% of households receiving a £150 Council Tax rebate from April.
- Chancellor Rishi Sunak announces £9.1 billion Energy Bills Rebate to support families with rising global energy prices.
Changes have further been made to Universal Credit to pay £1,000 more per year and to increase the National Living Wage. The one-off Universal Credit payment would be available to benefit claimants, mainly those facing a financial crisis such as unemployed or unable to cover essential expenses.
What can you do?
- Check your thermostat.
You can do this by simply reducing your thermostat by just one degree which would save the average household about 10%, which is around £200 worth of savings. Additionally, you can also check to see whether the thermostat is right for the flow of the boiler. The average household can save about £100 a year if they make that quick adjustment.
- Keep the heat in.
You can do this by blocking any draughts, turning down your thermostat or time your heating. For example you can switch the timer on a little earlier, so the house will be warm when needed, and this means you will not be pumping out energy all day.
- Turn off anything you are not using
- Watch your water usage
What support can you get?
Firstly, check if you can get support from the government or your energy supplier as they may offer grants. However, you might also be eligible for some benefits.
The Warm Home Discount gives you £140 off your electricity bill if you are on a low income or receive certain pension credits between October and March. If you get the guaranteed element of pension credit, you should get the discount automatically.
The Winter Fuel Payment is an annual one-off payment to help you pay for heating during the winter. If you were born on or before 26 September 1955 you can be eligible for this, and you should get it automatically. You can contact them on 0800 731 0160.
The Household Support Fund is where the local council might give you vouchers to help pay for day-to-day essentials.
Poverty is sadly all around us, and continues to increase with covid impacting households and the increase in energy bills. The pressure that low income families are already under to afford food, bills, petrol, taxes and essentials will only increase and so the government must clearly help families to prevent serious hardship once the energy price cap is lifted. The rise in energy bills will greatly affect those among pensioner households, local authority housing and those in poorly insulated homes. However, it is for us to take steps now to make these changes so that we can be ready when these changes are made on 1 April 2022.