The Chancellor's mini-Budget pledged over GBP1bn in additional funding to improve the insulation of people's homes over the next three years, the End Fuel Poverty Coalition has said. The coalition, which campaigns on fuel poverty, said the figure falls far short of the additional GBP5bn of energy efficiency investment it says is needed1.
The coalition published the assessment alongside its analysis of the Energy Price Guarantee, which caps the cost per unit that households pay. It said the combined electricity and gas unit cost of energy will surge for households by between 23% and 27% overnight on Friday 30 September, with the level depending on payment method and where people live1. Once standing charges are included, it said, those on standard credit will pay 12% more and those on pre-payment meters 11% more than those on direct debit1.
Its figures for direct debit customers show the gas unit rate rising from 7.37p to 10.3p per kWh, an increase of 39.76%, and the electricity unit rate from 28.34p to 34p per kWh, up 19.97%. For pre-payment customers the gas unit rate rises from 7.36p to 10.63p, up 44.43%, and electricity from 28.11p to 33.08p, up 17.68%. For standard credit customers gas rises from 7.76p to 11.12p, up 43.30%, and electricity from 29.85p to 36.8p, up 23.28%1.
| Payment method | Gas unit, until 30 Sep | Gas unit, from 1 Oct | Electricity unit, until 30 Sep | Electricity unit, from 1 Oct |
|---|---|---|---|---|
| Direct debit | 7.37p | 10.3p | 28.34p | 34p |
| Pre-payment meter | 7.36p | 10.63p | 28.11p | 33.08p |
| Standard credit | 7.76p | 11.12p | 29.85p | 36.8p |
The coalition said the Energy Bills Support Scheme will lower people's bills by GBP400 in the short term, but that this saving expires in April 2023, creating a fresh hike in bills. For households on benefits, the additional support they have had since May 2022 will also expire early in 20231. It said the number of UK households in fuel poverty will increase from 7 million from 1 October to nearer 8 million from 1 April 2023 as the scheme runs out1.
"The Government has created a double dose of pain for households. Many will be hit with the rising energy bills immediately, with another dose of pain inflicted when the financial support runs out by April 2023."
The coalition also reported that calls to the Asthma + Lung UK helpline from people needing advice on finances or benefits rose by 89% year on year, comparing August 2021 with August 2022, and that website traffic on these topics rose by 63% over the same period1.
Why it matters for households
The Energy Price Guarantee limits the price per unit, not the bill, so a household's costs still depend on how much gas and electricity it uses1. The coalition's unit rates show that the cost of each unit of gas and electricity rises on 1 October even with the guarantee in place, and that standing charges rise too. Because standing charges are fixed, they are incurred regardless of how little energy a household uses, which the coalition said leaves households with less control over their costs this winter1.
The insulation funding sits on the other side of the same problem: a better insulated home needs fewer units to stay warm, so it reduces exposure to unit prices. The coalition's position is that the GBP1bn pledged over three years is not enough to deliver the improvement in energy efficiency it says is required1. Grant support, costs and eligibility differ by nation, with separate arrangements for England, Scotland, Wales and Northern Ireland, and the relationship between insulation and a home's energy independence is set out in the guide to insulation, glazing and energy independence.
What happens next
The new unit rates and standing charges take effect on 1 October 20221. The GBP400 Energy Bills Support Scheme reduction expires in April 2023, and the additional support for households on benefits that has run since May 2022 expires early in 20231. The coalition said it wants action to reassure people that support will continue next year and urgent action to improve the energy efficiency of homes1. No further detail on how the GBP1bn insulation funding will be allocated has been reported.
Sources1 cited
- Homes to see energy prices surge overnight - End Fuel Poverty Coalition, endfuelpoverty.org.uk