This piece first appeared in Saga Magazine in January 2014

 

TAKING POWER

Fuel prices are rising for almost everyone. How can you control the cost of keeping warm this winter?

 The cost of heating your home is going up. The exact amount will depend on three things – your supplier, the region where you live, and how much fuel you use. The increases quoted for an average user ranges from 3.9% (EDF) to 10% (npower), or £49 to £137 a year. But these averages cover a wide variety of actual rises. They are always quoted for the typical user using figures set down by the regulator Ofgem. They assume you take both gas and electricity from the same supplier and pay by monthly direct debit. But many people in rural areas and those in high rise blocks cannot take both fuels because they have no piped gas supply. And many others do not like direct debits. In both cases they may face bigger rises – and certainly higher costs.

Some low energy users will also face much bigger increases as the structure of tariffs is changed. In future all suppliers must make two charges. A standing charge which is supposed to represent the fixed costs of supplying the pipes and wires and meters. And a single per unit rate for the electricity or gas. It is usually quoted in kilowatt hours (kWh) which represents the energy of the fuel you are buying. This change means that many low users will have to pay a standing charge for the first time however little energy they use. And that may mean a much bigger increase in their prices than the average rise stated by the company. Some people on prepayment meters with SSE who use half the average electricity could see their costs rise by 25%. And the less they use the bigger the rise.

Switching
Politicians like to encourage us to save money by switching our energy supplier. If you’ve never switched then doing it once is a good idea and can save you £200 a year. Switching is a simple process – the same electricity and gas flows down the same wires and pipes and your supply is never interrupted. You just pay less for it. The whole process is automated through the accredited online switching sites such as www.theenergyshop.com, www.uswitch.com and www.ukpower.co.uk. All use the same data and should give the same answers – though some are easier to use than others. If you don’t have access to a computer then you can do it over the phone – for example uswitch has a free phone 0808 1783 492. You will need to know the exact name of the tariff you are on and your energy usage for the last twelve months – your bills should contain all this information.  

If you have already switched once then the next time you will save much less. But it may be wroth fixing your prices for the next winter or two as prices are only going to go up. Pick a fix that has no penalty for leaving it early – that way you stay flexible. It may also be worth switching if you are a low user and want to find a tariff with a standing charge of zero. Ebico – which is expensive in other ways – offers this. And so does npower on some of its electricity tariffs. But npower recently came out worst on a customer service survey by Consumer Futures.

The process takes a few weeks. When it goes through you will pay whatever is owed to the old supplier or if you are in credit get a payment from it.

You can switch if you are on a prepayment meter even with a debt of up to £500. If you are a tenant and pay the bill you can switch whatever your landlord says. But some people in property where the landlord pays for the energy including those in park homes may be unable to switch. People in new build developments where the gas pipes have been laid by an Independent Gas Transporter rather than National Grid may have to pay a bit more for their gas.

New tariff rules
Each supplier is only allowed to offer four tariffs for each fuel. One must be a standard variable tariff. The others can be fixed or offer a different balance between standing charges and unit prices. They can also offer a discount for dual fuel customers – who take gas and electricity from them – and for managing your account online without paper bills. There will also be three different rates depending how you pay – pre-pay, quarterly, or monthly direct debit. From March 31 your bill must tell you if there is a cheaper tariff available from your supplier. And from June 30 people on older tariffs will be moved to the new tariffs – whichever is cheapest.

Economy 7
The new tariff rules will keep economy 7 and 10 (sometimes called white meter) electricity which gives a cheaper rate for seven hours at night (or seven at night and three in the day) and a more expensive rate at other times. These can work out cheaper for people with storage heaters. Hot water and washing machines can also be timed to come on at night. Switching to Economy 7/10 is unlikely to save money. But if you have it already and have stopped using storage heaters switching from it should save money, though you may be charged for a new meter.

Green taxes
Part of your bill pays for the cost of moving to green fuel supplies and for help like the Warm Homes Discount. The Government says these items total around £112 of the average dual fuel bill. In future some may be taken away from bills and paid from general taxation.

Warm Homes Discount
If you have a low income you may be able to get a discount of £135 off your winter electricity bill under the Warm Homes Discount. Some pensioners should get the discount automatically. Two groups get it automatically.

1. People who get the guarantee credit part of pension credit and do NOT get the savings credit.

2. People aged 75 or more who get the guarantee credit even if they also get the savings credit. But if they only get savings credit they cannot get it. The qualifying date for getting the benefits and being 75 is 20 July 2013.

Other people may qualify. All the suppliers have different rules. But if you have a young child or you are disabled and your income is very low you may qualify. Some suppliers also allow pensioners who are not in the automatic groups apply as well. Most of the smaller suppliers are not in the scheme. A full list of those suppliers that are is here https://www.gov.uk/the-warm-home-discount-scheme/eligibility

The Warm Homes Discount only applies in England, Scotland, and Wales. More information http://paullewismoney.blogspot.co.uk/2013/10/135-off-your-winter-electricity-bill.html or call the Home Heat Helpline 0800 33 66 99.

Energy trusts
If you really cannot pay an energy bill or you have other big debt problems some energy suppliers have charitable trusts that may be able to help. British Gas Energy Trust does not confine itself to customers and will help with any essential bill or the purchase of essential equipment such as a cooker or washing machine. You will have to show exceptional need. EDF Energy Trust and npower Energy Fund will only help their own customers. They will also pay energy or water bills and may help with other things. EDF helps in cases of exceptional need and npower also wants applicants to show they are managing their money well. More information www.britishgasenergytrust.org.uk  and links to other trusts http://www.npowerenergyfund.com/index.php?page=grantlinks. More information [link to my Can You Claim It when published – I have just sent to Andy]

Insulation
Insulation is sometimes called the fifth fuel. Money spent on insulating your home will reduce your bills at once and can repay the cost in a short time. You can get help with the costs from a whole variety of sources including your own energy supplier or the local council. The best place to go for advice is the Energy Saving Trust which can help throughout the UK. Call 0800 123 1234 or online www.energysavingtrust.org.uk. The Warm Homes Scheme in Northern Ireland can be contacted on 0800 988 0559.

 


go back to Saga writing
go back to writing archive

go back to the Paul Lewis front page
e-mail Paul Lewis on paul@paullewis.co.uk

All material on these pages is © Paul Lewis 2014