All the help you can get with energy bills worth up to £4,000
OFGEM’S latest energy price cap officially came into effect on Monday July 1, meaning many households will see a £122 reduction in their yearly bill.
The average household will now pay £1,568 a year on their energy bill, which is the lowest level in two years.
But energy costs are still much higher than what they were a few years ago, so if you are struggling you may be eligible for support in the form of cash or having your debt written off.
It comes as figures released today showed some 6.1 million households are still struggling to pay their energy bills.
A new study by Ofgem show energy debt levels stand a a record £3.1 billion.
“The fall in the price cap will alleviate some of the pressure many households are under, but our findings show that many more will continue to struggle as energy bills remain high,” Steve Vaid, chief executive of the Money Advice Trust, the charity that runs National Debtline, said.
“As millions of people worry about keeping up with their energy payments, arrears levels have continued to increase and many have been left with unaffordable debts as a result.
“Anyone struggling with their energy bills, or worried about their finances, should contact National Debtline as soon as possible – our advisers are here to help,” he added.
Read below to find out what help is out there and how it can save nearly £4,000 on your bill.
Energy grants – worth up to £2,000
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 has an energy grant scheme in place, with the hardest pressed households receiving a grant of up to £2,000 this year.
Typically, the families supported are in, or at risk of, fuel poverty – in addition to this 30% of clients supported are single parent families, 61% are living with a disability and 20% are food bank users.
The firm also has also launched a new 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 will open in June and eligible customers will be contacted directly – they won’t need to apply.
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 what help is available.
What is the energy price cap?
THE energy price cap limits the amount energy suppliers can charge for gas and electric.It is based on wholesale prices and changes every three months
The cap is a limit that applies to the unit price of gas an electric, but is shown as a figure representing the average energy use of a typical dual fuel household.
Also bear in mind that the energy price cap changes every three months so there is a possibility your monthly bill could rise again this year.
The cap will fall from the current rate of £1,690 a year to £1,568 – the lowest level in two years.
The most common way to pay your electricity bill is by setting up a direct debit with your supplier and this is also said to be the cheapest.
Household Support Fund (HSF) – up to £500
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 £500 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.
Switch to a direct debit – £100
Many households will still end up paying around £100 more each year than those who pay with a direct debit or a prepayment metre.
For many households the cheapest way to pay is via a direct debit.
Sometimes this is because energy suppliers offer a small discount if you choose to pay using this method.
The typical household that pays their energy bill by direct debit will pay the following rates:
- 22.36 pence per kWh (for electricity)
- 5.48 pence per kWh (for gas)
A typical household using a direct debit payment method will be charged £1,568 over a year for typical use.
Meanwhile, a household who pays on receipt of their bills will pay £1,668 over the same period.
- 23.54 pence per kWh (for electricity)
- 5.77 pence per kWh (for gas)
If you are keen to switch to a direct debit you should get in contact with your supplier and see if they can offer you a better deal than what you are currently paying.
It is important to speak to your supplier before you make the switch.
How to calcuate your energy bill
BELOW we reveal how you can calculate your own energy bill.
To calculate how much you pay for your energy bill, you must find out your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.The standing charge is a daily charge that is paid 365 days of the year – irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details, you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type – this will give you your usage costs.
You’ll then need to multiply each standing charge by 365 and add this figure to the totals for your usage – this will then give you your annual costs.
Divide this figure by 12, and you’ll be able to determine how much you should expect to p
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.
We have asked suppliers if they intend to roll out seasonal gadgets to help support customers over the summer months.
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.
Cold weather payments – £25
You may get Cold Weather Payments if you’re getting certain benefits.
You will get a payment if the average temperature in your area is recorded as, or forecast to be, zero degrees celsius or below over 7 consecutive days.
The amount is £25 for each 7 day period of very cold weather between 1 November 2024 and 31 March 2025.
The scheme is currently closed, but it is worth keeping mind when the winter approaches.
The Warm Home Discount Scheme
You may be entitled to a £150 discount off your electricity bill as the days get colder over winter.
The warm home scheme is a one off payment and applications open again in October 2024.
If you’re eligible, your electricity supplier will apply the discount to your bill. The money is not paid to you.
You’ll usually get the discount automatically if you’re eligible. You only need to apply if you’re on a low income in Scotland – contact your energy supplier to apply.
You may be able to get the discount on your gas bill instead if your supplier provides you with both gas and electricity and you’re eligible.
It is important to contact your supplier to find out.
Emergency pre-payment top
You can get temporary credit from your supplier, but you will have to pay this back.
You may also be able to get a fuel voucher.
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.
Contact your local council, food bank or Citizens Advice to find out more.
What to do if you are in debt?
IF you find yourself in debt the government has a number of support measures.
If you live in England or Wales, you can apply for Breathing Space (also called the Debt Respite Scheme).
This is a temporary protection period, to give you time to get debt advice and set up a solution. It means that for up to 60 days:
- your creditors (the people you owe money to) will have to stop trying to collect your debt
- your creditors will have to freeze most interest, fees and charges on your debt
- your energy supplier cannot install a prepayment meter without your permission, and cannot collect any debt using your prepayment meter
If you live in Scotland, you can apply for a debt moratorium.
During this temporary protection period, your creditors will not be able to take any action to recover what you owe them.