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Energy bills can be one of our highest expenses. During 2020, research by Compare the Market found that for lower income families, energy bills can amount to as much as 7.8% of their total weekly expenditure.
What can you do if you are struggling with paying your energy bills? Particularly during these cold winter months. Where can you get help?
In this article we look at:
- Three possible sources of help with paying your bills.
- Three ways you can reduce your bills.
Three sources of help with paying your energy bills
1. Your supplier
If you are struggling to pay your energy bills or topping up your prepayment meter, the best thing to do is to contact your supplier straightaway. The sooner you let them know about your situation, the more options they are likely to be able to offer you.
For example, they may be able to adjust your tariff or payment method. They may also be able to arrange a payment plan with you if you have fallen behind with your bills, or offer you some other kind of help. Also check whether they are part of the government Warm Home scheme, through which you could be entitled to a discount of up to £140 off your winter electricity bill if you are either on a low income or receiving pension credit.
Contact them as soon as you can. It can feel a bit intimidating, but there may well be something they can do to help you.
2. Government benefits
There are two benefits you may be entitled to, to help with paying your energy bills:
- Winter Fuel Payment
If you were born on or before 5th October 1954 and are receiving either the state pension or another social security benefit (excluding Housing Benefit, Council Tax Reduction, Child Benefit or Universal Credit) you should automatically get between £100 and £300 to help you pay your heating bills.
- Cold Weather Payment
If the weather is very cold, you will be eligible for this one-off payment if you receive any of the following benefits:
- Pension Credit
- Income Support
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance
- Universal Credit - You will receive £25 for each 7 day period of very cold weather between 1 November and 31 March. You should receive the payment automatically, you do not need to apply.
- Keep the heating a bit lower than usual and wear an extra layer of clothing instead.
- Switch off lights that aren’t being used.
- Switch off appliances at the wall, don’t leave them in standby mode.
- Use economy and low temperature settings on washing machines and other appliances.
- Showers are usually more economical than baths, and keep them as short as possible.
- Draught-proof your home to prevent cold air coming in and wasting heat.
- When using the oven cook several things together to make the most of the energy.
- Fill your fridge and freezer to keep them working at their best. Bowls of water are fine to fill up unused spaces.
3. Fuel Banks
If you have a prepayment meter and are struggling to keep it topped up, the Fuel Bank scheme may be able to help you.
Fuel Bank was originally developed by the energy supplier npower, but in 2017 it became a separate charity, the Fuel Bank Foundation. Fuel Bank is linked to Trussell Trust foodbanks which we mentioned in our last article.
The aim of Fuel Bank is to make sure that people have enough energy for cooking and heating. It is particularly aimed at customers who have problems with prepayment meters and are in danger of self-disconnection, because they cannot afford to keep their meter topped up.
If you are in this position, then you need to get a referral to a Trussell Trust Food Bank. The best way to do this is to contact your GP, social worker, or Citizens Advice on 0808 2082138. If you are eligible you will be given a food bank voucher. You then take this to your nearest food bank to receive your food.
Many food banks are also part of the Fuel Bank scheme. If this is the case you will be able to fill out an application to receive a fuel voucher which will enable you to top up your prepayment meter for around two weeks.
Three ways you can reduce your bills
1. Change supplier or tariff
On 1st October 2020, Ofgem lowered the energy price cap by £84 from £1,126 to £1,042. This is the lowest it’s been since it was first introduced in January 2019. The energy price cap limits how much a supplier can charge you per unit of electricity and gas. This is good news if you’re on a standard variable tariff because it means that there is an upper limit to what you have to pay.
But if you are on a standard variable tariff, it is worth checking with your energy supplier to see if there is another cheaper tariff they can offer you.
You should also look around at other suppliers to see if you can get a better deal elsewhere. A good place to start is by looking at a price comparison website: see some examples here. You will need to have a current bill in front of you to see what you are currently spending, and what you could save. Energy bills can sometimes be confusing, so it may be helpful to have a quick look at the Energy Saving Trust video Understanding your energy bills to help get you started.
If there is another supplier you want to switch to, and they accept your application, they will arrange everything for you, usually within three weeks.
2.Change the way you pay
If you are currently on a prepayment meter, contact your supplier to see if they can exchange this for a credit meter. With a credit meter, you pay for energy you have already used rather than paying as you go. This could enable you to get a better tariff and save money. Your supplier will usually run a credit check on you as part of the meter exchange process. If you pass this, they will then arrange to remove your current meter and install the new one.
If you have a credit meter, you may also be able to save more money by paying your energy bills by direct debit. This enables you to spread payments evenly throughout the year so you don’t face a huge increase in winter. Some energy suppliers also offer better deals to customers who pay by direct debit.
To start paying by direct debit, contact your supplier who will then send you a paper or online form to complete with your bank details. Once they have your details they will set up the direct debit straightaway.
3.Make small savings at home
There are many ways that you and your family can make small savings on the energy you use at home. These small savings can gradually add up to make a significant difference to your bills.
Here are some simple suggestions which can all save energy and money:
We hope the information above helps you to understand what help may be available to pay your energy bills, and also how you and your family can save energy in the home.
Check back here soon for more financial and lifestyle tips from Fair Finance.