Act quickly to beat Government cutbacks

December 2nd, 2013

Chancellor George Osbourne has announced the Government’s plans to reduce annual energy bills by around £50, but this will see changes made to energy efficiency schemes such as ECO.

Energy prices have been in the spotlight over the last couple of months, with each of the major six suppliers cranking up their costs and Labour promising to freeze prices if they come into power.

And to tackle the issue, the Coalition Government are looking to cut household spending by changing green schemes and energy efficiency incentives. MPs are still campaigning for the plans to be scrapped, which include grants and funding for vulnerable households and hard-to-treat homes.

How will the plans affect me?

The Government want to be seen as doing something to address UK energy prices, especially with their opposition already stating how they’ll make changes. As such, it’s the green schemes which have been hit in an effort to tackle price hikes. This means that the Energy Companies Obligation (ECO) scheme will be affected over the coming years.

Whilst the scheme will be extended two years until 2017, the funding on offer will be halved each year. The other scheme to be affected is the Warm Homes Discount, which will see funding taken from taxes rather than energy bills.

Energy bills have doubled in the last decade and since 2007 alone, gas and electricity prices have increased 41% and 20% respectively. And to make matters even worse, bills are expected to double again by 2020. More homeowners than ever are already in fuel poverty, with many more expected to join them over the next decade.

The big six energy suppliers, such as British Gas, Npower and EDF have all blamed the Government’s green taxes for the rise, but some MPs are still urging the Coalition to reconsider their plans. They argue that a long term strategy is better than a quick fix.

What should I do?

Of course, with the latest Government proposals, you’re likely to be affected in some way. Energy efficiency of your home remains vital, but to make use of the ECO scheme we’d advise to act quickly, with full Government plans yet to be unveiled.

The ECO scheme primarily helps vulnerable and hard-to-treat households, with a replacement boiler often top of the agenda. But wall cavity and solid wall insulation are also available with the scheme.

There are strict eligibility criteria though and if you don’t meet the scheme’s regulations, it’s still important to consider energy efficiency improvements. Payback can be as little as two years for some insulation measures and with a replacement boiler you can save over £300 a year.