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Tackling the additional energy costs faced by disabled people

Winter brings two certainties – lower temperatures and higher energy costs. This is particularly challenging for disabled people, who often consume more energy because of their impairment or condition.

In recent weeks, Ofgem – the energy regulator – and the Government have both announced short-term proposals to help tackle high energy costs. Whilst these are welcome, Scope is calling for more targeted reforms to support disabled people in the energy market.

Below we look at these changes in more detail and what they could mean for disabled people.

Disabled people’s experiences as energy consumers

Disabled people face a range of disability-related costs, amounting to an average of £550 a month, making it harder for disabled people to get into work, access education and training opportunities and participate in society fully.

Energy represents a significant type of extra cost for disabled people. In an independent inquiry into extra costs, The Extra Costs Commission, energy was the third most cited area of additional cost by disabled people.

Households with a disabled person spend on average over £3,000 a year on energy, compared to the £1,345 an average UK household spends. It is no surprise then that more than a quarter (29 per cent) of disabled people have struggled to pay their energy bills in the past year.

What changes have been announced?

In October, Ofgem announced a proposal to extend the Vulnerable Customer Safeguard Tariff. Currently, this limits the amount that  customers who are on a prepayment meter will pay for their energy bills. The extension would cover an additional one million customers who receive the Warm Homes Discount, which is a one-off discount for certain customers on their energy bills. This change would take effect from February 2018.

Ofgem has acknowledged that this approach will not support all groups with high energy costs, including many disabled people. It is considering what further steps it can take to support a wider pool of customers.

Alongside this, the Government has published its Draft Domestic Gas and Electricity (Tariff Cap) Bill. This would put an absolute cap on certain energy tariffs, including standard variable tariffs and default tariffs, which have variable prices that go up and down with the market.

The cap would be set by Ofgem and would be temporary in nature. It would last until the end of 2020, although it may be extended for a year on up to three occasions, depending on whether the market becomes more competitive.

The Business, Energy and Industrial Strategy Select Committee has been reviewing the Bill before it is introduced in Parliament. We have provided both written and oral evidence to the Committee, and we want to ensure that there is a clear process for evaluating how these changes will impact disabled people.

 What needs to change?

The proposed actions from Ofgem and the Government offer some short-term relief to some disabled people. However, long-term reforms are needed to specifically address the additional energy costs many disabled people face.

One area of focus needs to be on ensuring disabled people are accessing the support to which they are entitled. For instance, research by the Extra Costs Commission found that 40 per cent of disabled people were unfamiliar with the Warm Home Discount, meaning many individuals could be missing out on this support with their energy bills. We want Ofgem and energy suppliers to work together to increase awareness of these types of support.

We also believe the eligibility criteria for the Warm Home Discount is not as effectively targeted as it could be. We want the Government to review the criteria so that it captures a greater number of disabled people who face additional energy costs.

Over the past couple of weeks, we have been carrying out focus groups to deepen our understanding of the experiences of disabled people in the energy market. This will help us develop recommendations for tackling the additional energy costs faced by many disabled people, but it is clear that Government, Ofgem and energy suppliers all have a part to play.

Tell us about your experiences

Have you faced high energy costs because of your impairment or condition? If you would like to share your experiences, please contact: stories@scope.org.uk.

You can also visit Scope’s website for more information on support with your energy bills.