The mystery of the social tariff

Despite the tough economic climate, and energy bills rising, many UK consumers are not on the best tariff for their needs. Worse still, the most vulnerable are still unaware they may be classed as being in ‘fuel poverty' and be eligible for a social tariff, according to research from moneysupermarket.com.

The term ‘fuel poverty' is often used, and in recent years of recession and high energy bills it has been more and more widely coined, but research carried out by moneysupermarket.com shows very few people know what it actually means. Britain's number one comparison site found only a fifth of those surveyed (19 per cent) can correctly define ‘fuel poverty' as needing to spend more than 10 per cent of income on energy bills. 15 per cent believe it means they have to fork out 20 per cent of income, another 15 per cent admit they just don't know, and worryingly over two fifths of respondents (41 per cent) say it simply means you struggle to pay for the energy you use - rising to 45 per cent among Scots.

Scott Byrom, energy manager at moneysupermarket.com, said: "With such confusion about what being in fuel poverty actually means, I fear there could be far more than the five million people the industry estimates there to be in fuel poverty. There is a lot to be done to improve the situation; those in fuel poverty need more help and funding, and can't access this if they don't know to ask. With the best deals disappearing, I urge anyone who is already struggling to pay their energy bills through the summer months, to act now to find the best energy tariff for their needs before the winter months set in and consumption increases."

For those who are deemed to be in fuel poverty, there are specific energy tariffs available from providers to help those who most need it. Social tariffs are energy deals for vulnerable customers and fuel poor customers (those spending more than a tenth of their income on energy). And are designed to be affordable where conventional deals are just too costly.

Of those surveyed, just over a quarter of Brits (26 per cent) say they hadn't thought about moving to a social tariff, but that they probably should - rising to a worrying 33 per cent of people in Wales. A tenth say they are either thinking about moving onto a social tariff, are in the process of moving on to one, or are thinking about it.

Byrom continues: "Social tariffs are already provided by the major six UK energy companies to benefit those in fuel poverty, albeit that they all vary in what they offer and also have different criteria to qualify as there are no industry guidelines from Ofgem. There is definitely work to be done around increasing awareness of these tariffs and how people can go about moving on to them, and also having more transparency around what each tariff has to offer. If you think, or know, your household is in fuel poverty then it's crucial to speak to your provider about the options open to you.

"We firmly believe there is a desperate need for the UK to become more energy efficient, and cutting household bills is a key part of this.  Households should act immediately to ensure they are on the correct tariff for their usage and region; moving online to a dual fuel direct debit deal is the easiest way to make savings on their energy bills. Finding the best deal for your consumption and region is crucial, on average the best current deal on the market is the SaveOnline v2 from energy giant E.ON, at £882 a year."

moneysupermarket.com's top tips to minimise your gas and electricity bills:

Turn your thermostat down - now. By reducing your room temperature by just 1°C you could save an astonishing 10% on your annual heating bills.

Switch off and save. Don't leave electrical appliances on standby as it still uses power. Make it a nightly ritual to ensure all lights and appliances are off and watch those savings mount. For example, leaving your computer on 'sleep' means it is still using 75% of its energy.

Almost 25% of heat is lost via poorly insulated roofs. Invest in insulation - it is cheap and effective. What is more, many free grants are available from local councils for pensioners and those on low incomes.

Heating the whole house is justifiable for a large family but for working couples and singles, it is more cost-effective to heat only the rooms you use most. Invest in a low energy heater.

In the winter months, it pays to close all your curtains as soon as dusk sets - they keep the heat in and are one of the simplest and easiest ways of cutting back on heating bills.

Change to energy saving light bulbs. You can save up to £40 over the lifetime of the bulb.

Invest in a microwave oven. They are fast and efficient particularly for small families and singles and use a fraction of the energy of a conventional gas or electric cooker.

Watch out for draughts around doors (keyholes, letter boxes, gaps in doors and windows). Heat escaping your home is money wasted, so get yourself kitted out. Draught excluder packs are available from most DIY stores and for as little as £60. It is estimated that good draught exclusion around an average terrace can save as much as £25 a year, so it will soon pay for itself.

Double-glazing is pricey to install but will make a difference to bills over time. Heat loss through windows is cut by a whopping 50% - saving around £100 a year on bills.

Don't fill your kettle each time you go to make a coffee or cup of tea - only use the water you need. It will be quicker to boil and use less energy. It's a simple tip but makes a difference.

Take showers and not baths. While a hot bubble bath may feel like a treat, the cost of heating the water soon mounts up. A shower uses around a third of the water of a bath.

If you use a washing machine turn the temperature down to 30°C. Today's washing powders are so efficient they do not need to be used at high temperatures. Even better, get into the habit of hand-washing and just using your machine's spin function. It saves both time and money.