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Fuel Poverty

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Fuel poverty - and how to beat it

If you struggle to pay your energy bills, especially during winter when having the heating on pushes costs up, you could be one of the millions in the UK trapped in fuel poverty.

According to the Association for the Conservation of Energy, across the UK at the start of 2014, around 6.59m households were in fuel poverty - equivalent to one in four UK households.

You used to be classified to be living in fuel poverty if you spent10% or more of your household income on gas and electricity alone.

But following a Government review into this definition commissioned in 2010, fuel poverty is now measured by what is known as the 'Low Income High Costs' definition.

This means that you are considered to be in fuel poverty if your energy costs are above average and, were you to spend that amount, you'd be left with an income below the official poverty line.

What help is available?

If you need help with your energy bills, there are various government schemes which you might qualify for, depending on your age and whether you are claiming any other benefits.

Winter Fuel Payment

Older people aged 60 and over are eligible for the Winter Fuel Payment, which is a tax-free contribution towards energy costs, ranging from £100 up to £300. If you live alone you'll receive £200, or £300 if you were 80 or over in the qualifying week.

If you live with another person who qualifies then each of you will get £100, or £150 if you're aged 80 or over, making the combined total for the household £200 or £300.

You can claim the Winter Fuel Payment for this winter (2014/15) if you were born before July 5, 1952. You must be living in the UK throughout what is known as the 'qualifying week', which this year is September 15-21, 2014.

To find out more, read our Winter Fuel Payment guide.

Cold Weather Payment

When winters are exceptionally cold, you might also qualify for additional Cold Weather Payments. These are only made when temperatures drop below a certain level for at least seven days.

You will be eligible for Cold Weather Payments if you already receive Pension Credit, Income Support, income-based Jobseeker's Allowance or income-related Employment and Support Allowance (ESA).

For more details about Cold Weather Payments, click here for the MoneySupermarket Cold Weather Payments guide. 

Warm Home Discount Scheme

You could also be entitled to a discount of up to £140 on your electricity bills for the winter of 2014/15 thanks to the Warm Home Discount Scheme.

This was introduced in April 2011 as part of the government's Spending Review and was originally going to end after four years, but has now been extended for a year to 2015/16.

You should qualify for the Warm Home Discount if you receive of the guaranteed element of Pension Credit, are on a low income, living in fuel poverty or in receive certain benefits.

You can find out more by reading the MoneySuperMarket's Warm Home Discount guide.

Improve energy efficiency

Making sure your home is as energy efficient as possible is one of the best ways to reduce your gas and electricity bills.

If you're on a low income, you might qualify for a grant to install energy efficient measures such as cavity wall insulation.

For free and impartial advice on how to save energy in your home, contact the Energy Saving Advice Service:   

This service is provided by the Energy Saving Trust on behalf of the Department of Energy and Climate Change.

There are Government schemes available which provide funding to households on certain benefits to improve their heating and energy efficiency. In Scotland the scheme is called the Energy Assistance Scheme and in Wales it is Nest. The English scheme, called Warm Front, ended in January 2013.

The Government launched a new Green Deal in June 2014, which enabled you to pay for energy-saving improvements over time through a charge added to your electricity bill, rather than having to find the money up-front. However, this particular scheme closed to new applications in July 2014 due to “overwhelming popular demand”.

There is also the 'Energy Company Obligation', whereby the big six energy suppliers are required to help low income and vulnerable household save on energy bills and carbon emissions.

There are complex eligibility criteria for this means-tested scheme. Contact the Energy Saving Advice Service on the number above to find out if you qualify.

To learn more about ways you can keep warm, or if you're worried about paying your energy bills, contact the 'Home Heat Helpline'. This was launched by the Energy Retail Association (now Energy UK following its merger with the Association of Electricity Producers and the UK Business Council for Sustainable Energy) in 2005.

You can call the helpline free on 0800 33 66 99. It's open from 9am-5.30pm Monday to Friday.