Energy prices to rise from New Years Day
The average household will pay around £94 more for their energy from 1 January after Ofgem announced an increase to the energy price cap today.
Ofgem reviews the energy price cap every three months and sets a level on how much an energy supplier can charge for each unit of energy.
It is to increase the unit rate an average household pays to 29p/kWh for electricity and 7p/kWh for gas from New Years Day.
The increase in the price cap is being blamed on the cost of wholesale gas which has increased again in recent months due to world events including the conflict between Israel and Hamas.
Standing charges – the fixed daily amount you pay to have gas and electric connected to your home regardless of how much energy you use – have not increased and will remain at 53 per day for electricity and 30 per day for gas.
However, the cost of standing charges have soared since the price cap was introduced four years ago, with them increasing by 60% in the past two years for dual-fuel bills and 113% for electricity alone - adding around £300 a year to the average bill.
Low-income households on prepaid meters or those who choose to pay a bill after it arrives have seen their standing charges increase by an 80% over the past four years.
Ofgem recently launched a consultation on standing charges to see what the viable alternatives are. Find more about it here.
What should you do if you can’t afford your energy bills?
You’re definitely not alone. A lot of people are still struggling to deal with the energy debt they built up last winter. Around 60% of the people who got in touch with us for debt help last month did so because they were behind with their energy bills.
Those people did the right thing. If you’re unable to cover all your living expenses, don’t struggle on alone. We offer free debt advice and can help in a whole range of ways, including:
- checking you’re claiming all the benefits you can get
- coming up with a realistic budget you can stick to
- advising you on debt solutions that may allow you to reduce your monthly payments and even write off some of what you owe
All our advice is free and impartial, so finding out your options won’t cost you a thing. Our budgeting and benefits checks are also free and we’ll spend as much time with you as you need. If it turns out you’d benefit from a debt solution, some of them are free while for others there’s a fee.
You can get online debt advice 24/7. Or if you prefer to talk to someone on the phone, we’re here Monday to Friday 8am to 8pm and over the weekend from 10am to 4pm. Give us a call on 0161 518 8282.
Are the government offering any more energy support to low-income households this winter?
The government isn’t offering the £400 in energy bills support again this winter, but there are a few other schemes in place to help certain people cover the cost of their gas and electricity:
Warm Home Discount
You could get £150 off your electricity bill this winter under the Warm Home Discount scheme if you either:
- get the guarantee credit element of pension credit
- are on a low income
Help with energy-saving improvements
You may be able to get help for energy-saving improvements to your home if you get certain benefits or live in social housing.
You could get up to £900 in three instalments if you’re on means-tested benefits.
There’s also an extra £300 pensioner cost-of-living payment and a £150 disability cost-of-living payment for people who get certain disability benefits.
Winter fuel payment
Pensioners get a winter fuel payment too.
Household Support Fund
Local councils are also offering cost-of-living help as part of the Household Support Fund. Contact your local council directly to find out what’s available in your area.
Our top ten tips to help you stay warm for less this winter
Whether you’re entitled to any government support or not, we’ve come up with our top ten tips to help you stay warm and keep your energy costs to a minimum this winter:
You could save around £75 a year by installing room thermostats or radiator valves in the rooms you use the most - but they need to be placed in the right spot. Avoid areas with extreme temperatures, such as by doors, windows or radiators and keep them away from lamps and electrical items like TV’s, as they can make a room appear hotter or cooler than it is.
Block draughty door frames
If less heat escapes, your rooms will stay warmer for longer and could save around £60 a year in heating bills. Fit rubber, foam, brush, or wiper strips to keep heat in a room. Attach them to the frame of your doors with adhesive, screws, or nails. You can also buy fabric draft excluders to put in front of doors. Retailers such as Amazon and Dunelm have magnetic thermal insulated door panels for £29.99.
Keep curtains closed
Curtains reduce the amount of air exchange between a cold window and the rest of the room. High quality curtains can reduce heat loss by around 40% especially if they’re floor length.
Make sure furniture isn’t blocking radiators
Don’t block your radiators with furniture or sofas as it stops heat being distributed throughout the room. You should leave around 6 to 12 inches between any furniture and radiators to ensure free movement of air and circulation of heat.
Insulate pipework & hot water tank
Insulating your pipes is easy and relatively cheap. Without insultation a lot of warmth is lost through pipes into cold spaces like your loft, meaning you need more energy to heat your house. It costs around £1.75 per meter to insulate your pipes. All you need to do is buy the right size foam tube and fit it over.
Tin foil the radiators
Fit reflective panels behind radiators especially those that are fixed to external walls. You can pick them up for as little as £8.99. Alternatively, tin foil works just as well. It works by reflecting heat into the room instead of it being lost through the cold wall.
Layer up or heat yourself
You should make sure to layer up clothing at all times to trap heat against your body. Start with thermal vests, t shirts, jumpers and a coat or gilet, and invest in good quality, thick socks. Alternatively, you could invest in heated clothes, such as vest or blankets, to keep you toasty all day long. It cost just pennies to charge the batteries overnight.
Find warm, safe places
Warm spaces are being hosted in libraries and community centres up and down the country. They’ve also been set up in theatres, art galleries, museums, children’s centres, churches, and other religious buildings. They allow people to spend time in a heated environment where there’s often a free hot drink on offer and the opportunity to chat. You can find your nearest warm space either by contacting your local council or visiting www.warmspaces.org
Get help from your local council
Your local council might be able to help you with money towards your energy bills or with the cost of making your home more energy efficient through the Household Support Fund. Each council chooses how they’ll distribute their fund – they may offer vouchers or cash. To find out what support is available to you, speak to your local council or visit www.gov.uk
Grant help to pay energy debt
If you’re in debt to your energy supplier and have no realistic way to repay it, you might be entitled to a grant. A number of suppliers offer grants to struggling customers, including:
- British Gas Energy Support Fund – apply online
- Scottish Power Hardship Fund – apply online
- Ovo Customer Support Package – apply online
- E.ON Next Enerty Fund – apply online
- EDF Energy Customer Support Fund – sign up to the priority support register to apply
- Octopus ‘Octo Assist Fund’ – apply online
- Shell Energy Support Fund – apply online
The British Gas Energy Trust also offers to grants to anyone – regardless of whether you’re a customer – to help with energy debts.
Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.
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