Heat help scrapped as latest energy rise hits

Households face soaring bills after aid is cut. But critics say carbon tax could help end fuel poverty

British pensioners spent £17.4bn on electricity and fuel bills in 2012 (Rex Features)

The Government is scrapping its Warm Front programme which gives grants to insulate the homes of the fuel-poor from next Friday.

On the same day, energy giant E.ON is increasing gas and electric prices by 8.7 per cent, leaving its customers forced to find an average £110 a year to heat and light their homes.

The Government slashd the money received by the fuel-poor in England by 26 per cent between 2009 and 2013, warned Ed Matthew, director of the Energy Bill Revolution alliance campaign.

"It is scandalous to cut Warm Front as this is one of the most effective programmes the Government has to tackle fuel poverty," Mr Matthew said. "The Government should be ramping it up, not destroying it in the face of rising energy bills."

Meanwhile, research published yesterday by Saga revealed that the UK's 12.85 million pensioners spent £17.4bn on electricity and fuel bills in 2012.

The average yearly cost of energy for the over-65s last year was £1,355.90, which more than twice the £668.98 price of energy in 2005. Saga's analysis shows that the portion of income spent by over-50s on fuel has increased at a faster rate than for the rest of the population, meaning that the latest round of price increases – E.ON is the last of the "Big Six" firms to hike prices – pose even more of a financial issue for vulnerable older people.

"While incomes have increased in the last seven years, they have not kept pace with the rate that energy and fuel costs have risen, meaning that people are spending more of their income on fuel," pointed out Ros Altmann, director-general of Saga.

"This is especially true for older people who are often on lump or fixed incomes or whose savings income has fallen."

One way to cut bills is to switch to a cheaper supplier, but new research from comparison site Go Compare suggests only just over 23 per cent of households have changes provider in the last 12 months.

More alarmingly, the research shows that some 16 per cent of households have never switched energy provider. With some tariffs costing up to £300 more than the cheapest on the market, those people are almost certainly paying over the odds for their heating.

The last day for new applications to the Warm Front scheme is 19 January, which effectively means you must apply by Friday. The scheme gives households the opportunity to get help worth up to £3,500 to improve the heating or insulation of homes.

To qualify for the cash you must be receiving benefits or pension credit. Anyone who thinks they may be eligible should call 0300 123 1234.

In the meantime, the Energy Bill Revolution campaign is calling for carbon tax to be used to end fuel poverty, which currently affects six million homes, but could rise to nine million in the next couple of years.

Campaigners point out that the Government will raise more than £2bn in carbon-tax revenue in 2013 with consumers each paying an average of £25 on their electricity bill.

By 2020 the Government will raise £4bn in carbon tax each year with consumers paying an average of £54.

"If the Government recycled carbon tax to super-insulate UK homes they could fuel-poverty proof over half a million homes a year, saving each one £300 every year," said Mr Matthew. They say they are doing everything they can to bring down energy bills. But this is simply not true."