Help with rising energy costs

Earlier this month, Chancellor Rishi Sunak visited a local Age UK to meet older people and discuss the government’s package of financial support in response to the rise in energy bills.

The Chancellor announced a reduction in council tax on properties in bands A to D and a £200 rebate on energy bills in the form of a loan.

The support package comes after energy regulator Ofgem announced an increase to the energy price cap as a result of the soaring global wholesale price of gas. This means that consumers will see the average annual energy bill increase by nearly £700.

During the visit, older constituents discussed how the rising cost of living is affecting them and their worries about future rises in their energy bills. Many were concerned that they stand to gain little from the reduction in council tax, as they do not live in a property that qualifies, and that the £200 rebate on energy bills is a loan and not a grant.  These are things we'd recommend that you keep in mind.

How will this financial support work?

>The Energy Bills Rebate. This will provide around 28 million households with discount on their bills worth £200. Energy suppliers will apply the discount to domestic electricity customers from October, with the Government meeting the costs. The 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.

>Council Tax Reduction. Households in England, which are in council tax bands A-D, will receive a £150 rebate. The rebate to bills will be made directly by local authorities from April. This will not need to be repaid.

Will the increase in energy price cap affect everyone?

The increase in energy price cap will not affect everyone. However, anyone who is on a standard variable tariff, whose fixed deal has come to an end (or is about to), and those moved because their old supplier went bust will be affected by the new higher cap. An average annual energy bill could increase by nearly £700.

Shine, Islington Council’s Energy Advice Service advise that “When prices change it’s important to make sure that you are not paying for something that you are not using or being undercharged which will lead to a bigger bill further down the line when the rates are higher.”

There is a separate cap for 4.5 million people on prepayment meters.

What can you do if you’re having trouble paying your energy bills?

Contact Age UK Islington about the steps to take, starting with you calling your energy supplier. Age UK Islington can make sure you’re getting any benefits or support that you’re eligible for, or could apply for.

Possible financial support includes:

>Warm Home Discount.  This provides a £140 rebate on energy bills each winter to over 2.2 million low-income households.

How to get it? If you qualify, the £140 will be added to your electricity account at some point between October and March.  The qualifying date is usually July to receive a discount the following winter.

You should receive a letter from the DWP which will let you know whether you need to take any action or confirm any details with them. Usually the discount will be applied automatically without you needing to do anything.

For more information: https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/warm-home-discount/

>Warmth in Winter Fund. This helps people stay as warm as possible during the cold weather. Previous funds have been given to help with current or outstanding fuel bills/ payments, blankets/ bedding, thicker curtains, and heaters.

How to get it? Contact Age UK Islington's Helpline (details below) to be given support to complete an application form. You’ll need to provide proof of low income and any savings. 

>Winter Fuel Payments. Most people of state pension age are entitled to the Winter Fuel Payment to help with heating costs. For households with somebody who has reached State Pension age this is £200.  For households with somebody aged 80 and over this is £300.

How to get it?  If you're eligible and receive the necessary benefits, e.g. pension credit, you will receive your Winter Fuel Payment automatically and won't have to make a claim.

For more information: https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/winter-fuel-payment/

>Cold Weather Payment. This provides £25 extra a week for people receiving benefits, e.g. pension credit, when the temperature is consistently below zero for 7 days.

How to get it? If you’re eligible for a Cold Weather Payment, you should be paid automatically after each 7 day period of cold weather. 

For more information: https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/cold-weather-payment/

Making energy savings

There are lots of ways we can all save energy.  This includes simple things like turning off lights when they’re not being used to taking a shower rather than a bath.  For a full list of ideas, see the Age UK national website:

https://www.ageuk.org.uk/information-advice/money-legal/debt-savings/energy/energy-saving-tips/

Priority Services Register

If you need extra help with things like meter reading or advance notice of any power cuts e.g. if you’re reliant on power medical reasons, make sure you get added to the Priority Services Register

Thames Water’s Watersure scheme

Thames water have schemes to help reduce the cost of your bills. This includes low-income households and those with water-dependent medical conditions. Contact: 0800 980 8800.

Further Council Tax Support

In addition to the reduction in council tax on properties in bands A to D this year, you may be entitled to support if you are on a low income or are receiving benefits (such as Jobseekers Allowance, or Income Support).

For more information: https://www.islington.gov.uk/benefits-and-support/council-tax-support

Contact us

If you need any more information, contact Age UK Islington on their helpline, Monday to Friday 020 7281 6018 or gethelp@ageukislington.org.uk.

Pam, 75, who contacted Age UK for advice, said: “I’ve had really bad periods when I couldn’t even open the bills. “I now get Attendance Allowance and Pension Credit. I also get other help, I now don’t pay Council Tax anymore – even with a quarter discount off, I was still paying about £1000 a year, which is a huge amount of money. And now I’m 75, I get my free TV licence. Without Age UK, I wouldn’t have known about any of that.

Sources used for this article:

https://www.gov.uk/government/news/millions-to-receive-350-boost-to-help-with-rising-energy-costs