Affordable Warmth Obligation scheme eligibility explained as the energy crisis continues | Personal Finance | Finance
Universal Credit claimants have had their payments reduced by just over £1,000 a year as coronavirus support measures were removed. Unfortunately, claimants may also have to contend with rising energy bills on top of this for the months ahead as supply chain issues and wholesale gas price problems emerge.
Affordable Warmth Obligation
Fortunately, while there is little consumers can do to affect energy prices, there are various support schemes they can take advantage of to lower their costs. One of these schemes includes the Affordable Warmth Obligation.
Under this scheme, people may be able to get help for energy-saving improvements to their homes if they either claim certain benefits or live in social housing.
Claimants may be able to get help with the cost of insulation work, for example to loft or cavity walls, replacing or repairing boilers, or other upgrades to heating systems.
Those who are social housing tenants living in housing with an energy efficiency rating of E, F, or G might be eligible for help with insulation or installing a heating system for the first time. To do this, they can use the energy performance certificate register to find their property’s energy efficiency rating, or ask their landlord or housing association.
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People may also be eligible for help if they live in private housing and get one of the following benefits:
- Child Tax Credit
- Working Tax Credit
- Universal Credit
- Pension Guarantee Credit – you will not be eligible if you only claim Pension Savings Credit
- Income Support
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Disability Living Allowance
- Personal Independence Payment (PIP)
- Attendance Allowance
- Carer’s Allowance
- Severe Disablement Allowance
- Industrial Injuries Disablement Benefits
- War Pensions Mobility Supplement
- Constant Attendance Allowance
- Armed Forces Independence Payment
- Child Benefit
It should be noted renters must have the owner’s permission before work can commence. Under ECO rules. To see if one is eligible for this support and receive guidance on next steps, claimants should head to www.simpleenergyadvice.org.uk.
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Taking advantage of these kinds of support schemes could be crucial for the months ahead, as consumers are on the verge of unprecedented bill hikes. According to analysis from Cornwall Insight, energy bills may rise by as much as 30 percent next year if gas and electricity prices continue to rise and more suppliers go bust.
The research company forecasted the energy price cap, which is currently set at a record-breaking £1,277 a year, may be increased further to just over £1,600 to cope with the ongoing crisis.
In responding to UK wholesale gas prices reaching record highs in recent weeks, Victoria Scholar, Head of Investment at interactive investor, explained what’s causing the drastic moves.
“UK’s wholesale natural gas prices have hit fresh record-highs, rallying nearly 40 percent in today’s session alone to over 400 pence per therm, with prices rising by more than 100 percent over the last month,” she said.
“European natural gas prices are also surging over 20 percent, also at a record high. Britain has been hit hardest by the crisis with around 40 percent of its energy coming from gas. There is a major imbalance in the market with some describing this as the global financial crisis for commodities. The shortage of gas has been driven by a resurgence in demand post covid, particularly from Asia.
“This is outstripping supply, which has suffered from a series of small disruptions that have hit aggregate output. Expectations for a cold winter ahead, low investment in substitute fossil fuels and unusually low levels of wind to power renewables turbines are all adding to the pressure.”
Myron Jobson, a Personal Finance Campaigner at interactive investor, explained how British consumers are set to be caught out by unfortunate economic circumstances.
“Energy providers are dropping like flies as the sector continues to battle an unprecedented rise in the cost of wholesale gas, with prices rising well above levels many suppliers could pass on to customers,” she said.
“The harsh reality is scores of customers of failed energy firms will be moved automatically onto new, and invariably more expensive, tariffs.
“More broadly, the prospect of higher energy bills is a huge worry for people on the financial cliff edge, and with the £20 uplift to Universal Credit and Working Tax credits coming to an end, the nation’s most vulnerable face the dilemma of choosing between heating or eating this winter.”
Fortunately, as energy problems emerged, a number of experts stepped forward to provide tips and guidance on how consumers can reduce their bills.
Energy saving tips
Utilising less energy is an obvious way to reduce utility costs but in the modern world, this can be easier said than done. to help with this, a spokesperson from NetVoucherCodes.co.uk shared the following advice on how people can cut their bills:
- Move furniture: Ensure furniture is not covering radiators, as this can block heat from filling your home. A sofa or bulky chair will trap heat, meaning you’re paying for the warmth but not feeling the benefit of it.
- Fridge freezers: These hefty white goods can consume up to a third of all the power in your home. Investing in an energy-efficient appliance should lower the cost of running them long term and reduce CO2 emissions. Fridges with energy labels A+++ will consume up to 80 percent less than a rating D. Other money-saving tips include keeping the door shut, especially if you are spending a large time browsing for the perfect snack. Your fridge will be working overtime trying to achieve its optimum temperature. Don’t forget to defrost your fridge when prompted. A build-up of ice could seriously damage the efficiency of your fridge. Regular defrosting can help avoid this.
- TV: Regularly running for hours on standby will waste loads of electricity. Switching the power off at the wall is the best way to avoid this energy munching mistake. Pick a LED TV, over an LCD or plasma screen, as they consume far less energy.
- Tumble Dryers: While they are a complete blessing when you need your washing in a hurry, the tumble dryer is notorious for racking up your energy bills. Be more mindful when it comes to drying your clothes. Make the most of sunny days and hang out the washing or use maidens around your home. When you do go to use your tumble dryer, make sure it’s full to maximise efficiency. The less you use it, the better!
- Lights: Switching off lights when you leave a room is probably the most talked-about energy-saving tip. While it may be the simplest way to save energy, it’s surprising how many of us forget! Energy-efficient LED light bulbs can be up to 80 percent more efficient than conventional bulbs
- Desktop Computers: Desktop computers are energy-hungry and can cost up to £13 a year to run. This all adds up, especially when compared to the annual £4 used for your portable laptop. Add a printer into the mix and you will be spending even more.
- Smart thermostats: Investing in a smart thermostat is a great way to control how much energy you’re using through your central heating. Thermostats can be set from your phone, letting you control the temperature from afar. Put your heater on a timer so you’re not overspending without even realising. Investing in a more energy-efficient, A-rated condensing boiler could save you up to a huge £300 per year. These new style boilers include a programmer, room thermostat and thermostatic radiator controls.