What is a social tariff? Why do we need one? What does support look like for vulnerable customers?
Even as the price of electricity and gas has come down from the historic highs of winter 22/23, we’re still feeling the effects of the energy crisis with prices remaining much higher than before the 2022, and those effects are not felt equally. For low-income households, energy bills can take up an excessive part of their income, putting them in fuel poverty. In fact, according to the charity National Energy Action, the number of UK households in fuel poverty has gone up from 4.5 million in October 2021 to 6.3 million in October 2023(1). Households are defined as being in fuel poverty if they need to spend 10% or more of their income on energy in order to maintain a satisfactory heating regime.
At E.ON Next, we believe that action must be taken to help the most vulnerable. That’s why we’ve been campaigning the government about social tariffs, and providing support for our customers.
But what is a social tariff?
Put simply, a social tariff is a discount energy deal for eligible low-income households.
Earlier this year, Citizens Advice teamed up with the Social Market Foundation and Public First to share their recommendations for a UK social tariff(2).
They suggested that the social tariff should target reducing fuel poverty. For them, this means giving households that spend too much of their income on energy bills an annual lump sum payment. The payment amount would be based on household income and energy bill size, with an average recommended payment of £900 for a £3,000 annual energy bill.
To make sure it's accessible to everyone who needs help, Citizens Advice recommended that payments should be based on household income and energy use (and not just if they receive benefits or not). There are plenty of homes out there that may not receive benefits but still struggle with paying their energy bills - and could do with help paying those bills.
Help beyond the social tariff.
We’re currently working hard campaigning the government to introduce a social tariff, but what if you need help now?
Fortunately you can get that help in a number of ways.
First of all there is the E.ON Next Energy Fund. This offers two ways to help people who are going through financial hardship.
With a grant to help pay your energy bill arrears.
To replace any white goods (such as cookers, fridges and so on) that are broken or in poor condition.
We’re also happy for you to reduce your direct debit by up to 10% (and spread the cost).
And we have partnered with Energy UK, Ofgem and Citizens Advice to help customers through the Voluntary Debt Commitment for Winter 2023. This is a whole raft of helpful measures to ensure that customers struggling to pay their energy bills are treated fairly and equitably - and do not slip into fuel poverty.
More efficient energy use.
Of course, one way to use less energy overall (and cut your costs) is to use it more efficiently. Not only does it help to reduce your energy bill, but it also reduces your carbon footprint too.
This is where the Energy Company Obligation (ECO) comes in. This is about helping the most vulnerable to improve energy efficiency in their homes.
That means help with things like insulation or a new heating system. And one of the quickest (and easiest) ways to help is to get a smart meter.
A smart meter could help you save energy and money by
Eliminating estimated bills, so you only pay for the energy you use.
Letting you track when you are using more energy - and then adjust your habits to reduce your use.
Showing you exactly what you are spending to help you budget for the next bill.
A social tariff could make a big difference to people struggling with fuel poverty, and E.ON Next is committed to working with the government to provide bill support for our most vulnerable customers.
If you feel you are struggling to pay your bills or keep yourselves warm this winter, please get in touch. We have a number of ways that could help you now.
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