Gas will cost an average 17.4% more this winter, while electricity prices have jumped by an average of 10.8%.
This takes the annual energy bill for a typical home up to a staggering £1,322, around £150 more than last year – simply unaffordable for many households.
The Warm Home Discount Scheme
Part of the government’s answer to this problem is the Warm Home Discount Scheme (WHDS), which was introduced on 1 April 2011 as part of its Spending Review.
It requires, by law, that energy companies above a certain size must provide their most vulnerable customers with a rebate on their annual energy bills. During the forthcoming winter (2011/2012), this rebate will amount to £120.
Only the Big Six energy firms; namely, British Gas, Southern Electric, Scottish & Southern, E.ON, EDF Energy and npower, fall under the main part of the government’s scheme.
But some smaller energy providers offer ‘broader group schemes’ which you may qualify for. For a full list of these, visit the Department of Energy and Climate Change website.
Helping the poorest automatically
You will automatically qualify for the WHDS if you fall into the ‘core group’ of people who receive the guarantee element of Pension Credit. In this case, you won’t have to do a thing.
Legal data-sharing between the Department for Work and Pensions (DWP) and the energy companies, means you will be automatically identified and sent a letter from your energy supplier to inform you of the rebate.
This should fall onto your mat any time between mid-November 2011 and the end of February 2012. The rebate will then be made via a reduction in your energy bills early next year.
The government estimates that around 600,000 of the poorest pensioner households will receive the £120 rebate on their electricity bills this winter.
Other households that could be in line for help
But the WHDS doesn’t only apply to pensioners. You may fall into what’s known as the ‘broader group’ which is where it gets complicated, as eligibility will depend on your specific energy supplier.
Examples of qualifying criteria include being in receipt of the savings element of Pension Credit, claiming Income Support, income-related Employment and Support Allowance (ESA) or Income-based Job Seeker’s Allowance, or simply being in a household with below minimum income – £16,190 in the case of British Gas.
You may also qualify if you are on Long-term Incapacity Benefit or if you or a child in your household receives Disability Living Allowance. Alternatively you may only need to have a child in the household aged under five to qualify.
Ultimately, criteria vary so check your energy supplier’s website. You can also contact the Warm Home Discount Scheme Helpline direct on 0845 603 9439 for more information.
Getting ahead of the curve
If you find that you are eligible under your own energy provider’s criteria, it should send you a letter requesting more information about your circumstances. This must be returned by 28 March 2012 at the latest if you want to benefit.
However, availability for the scheme is limited, so it’s a good idea to contact your energy supplier in advance just in case you miss out.
Other ways to keep down the cost of your energy bills
Despite the government’s good intentions, most householders won’t qualify for the £120 rebate. But there are other ways of keeping your energy bills down this winter:
Shop around for the best supplier and tariff
Check you are on the cheapest energy deal. This is easy to do using MoneySupermarket’s energy calculator.
You’ll be asked for your postcode, who your existing energy provider is, your usage or how much your current bills are, and how you pay (quarterly by cash/cheque or by monthly direct debit).
The results will then identify the best value tariff and show you how much you stand to knock off your annual bill.
It’s well worth doing - if you’ve never switched energy provider before, you could save an average of £237 on your annual gas and electricity costs.
Online variable tariffs are the cheapest but if you want to shelter yourself from further price hikes, you may prefer a fixed price deal (the best aren’t much more expensive than the leading variable deals).
If you aren’t sure how to work out what the best option is, call MoneySupermarket’s energy team for free advice on 0845 345 1296.
Insulate your loft and cavity walls
Older homes especially, lose a large proportion of heat through the walls and roof. Consider getting cavity wall insulation, which could save you as much as £110 a year. Loft insulation, to a thickness of 270mm, could reduce your bills by a further £175 a year.
With both these improvement costing in the region of £500 depending on the type of property, they will soon pay for themselves.
Government grants may also be available for energy-efficient improvements at the Energy Saving Trust website.
It’s also worth checking to see what deals your energy provider is offering. Find out more about this in Les Robert’s article ‘What’s your energy provider doing to help this winter?’
Turn down the thermometer a one-degree notch
While no one likes to be cold at home, it’s likely you won’t notice a drop in temperature of one degree – and this could knock a further £50 off your heating bills over the course of the year. Even drawing the curtains and keeping doors closed will keep in the heat you are paying for.
Change your boiler
If it’s time to replace your boiler, swap it for an energy-efficient condensing one. It’ll obviously cost you to install a new one but it could knock around £300 a year off your annual bill so it should soon pay for itself.
Get into good habits
Little habits can go a long way when saving on your energy bills. For example, boiling only the water you need, taking a shower instead of a bath and washing your clothes on a perfectly adequate 30 degrees will all contribute to a leaner cost of household energy.
After all, if there has ever been a time to take control of your energy usage, it’s now.
Please note: Any rates or deals mentioned in this article were available at the time of writing.
*Up to 10% can save at least £244.64, MoneySupermarket data based on sales. June 2013