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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.

How can the next government improve disabled people’s financial security?

We want the next government to deliver Everyday Equality with disabled people. It must put the interests of disabled people at the heart of its agenda and deliver meaningful change over the next five years to tackle the barriers that prevent disabled people from participating fully in society.

A major barrier to achieving everyday equality is the additional costs disabled people face as a result of their impairment or condition.

That’s why we are calling on the next government to improve disabled people’s financial security.

Life is more expensive if you are disabled

On average, disabled people spend £550 a month on costs related to their impairment or condition. These costs may include expensive items of specialised equipment, higher heating bills, or more costly insurance premiums.

Infographic reads: Life costs more if you're disabled. On average, disabled people spend £550 a month on disability related costs

These costs have a detrimental impact on disabled people’s financial stability. For instance, disabled people have an average of £108,000 fewer savings and assets than non-disabled people, whilst households with a disabled person are more likely to have unsecured debt compared to households without a disabled member.

The financial barrier of extra costs makes it harder for individuals to get into work, access education and training opportunities, and participate fully in their community.

It is vital that the next government tackles the financial penalty experienced by disabled people.

Ensuring disabled people have adequate support to meet extra costs

Personal Independence Payment (PIP) – the successor to Disability Living Allowance (DLA) – plays a key role in helping disabled people meet some of the additional costs of disability.

However, we know that applying for PIP is often a stressful process for disabled people. Our helpline saw a 542 per cent rise in PIP-related calls in the period April 2016 to March 2017 compared to the year previously, many of which were concerning difficulties disabled people and their families were experiencing with the assessment.

The assessment for PIP looks at how a person’s impairment or condition impacts upon their ability to carry out a series of day-to-day activities. We are concerned that this does not always capture the full range of additional costs that disabled people face. This can be seen by the fact that two thirds of individuals are successful when they appeal a decision following their PIP assessment.

That’s why we’re calling for the next government to protect the value of PIP and develop a new assessment for the payment that accurately identifies the range and level of disabled people’s extra costs.

We also know that life is particularly difficult for families where both adults and children face disability related costs.

As such, we want to see PIP and DLA act as a passport to other benefits for families with disabled children, such as free school meals and support with health costs.

Driving down extra costs

Action is also needed to drive down the extra costs that disabled people face in the first place.

Households with a disabled person spend £249 billion a year, the so-called “purple pound”. Yet, disabled people are too often unable to access essential goods and services at an affordable price, making it difficult to capitalise on this spending power.

Many disabled people also encounter poor customer service from businesses, with three quarters having left a shop or business because of a lack of disability awareness.

Two particular sectors where disabled people tell us they struggle as consumers are energy and insurance. For instance, Scope research shows that 29 per cent of disabled people have struggled to pay their energy bills in the past year. In the insurance market, two and a half million disabled people feel they have been overcharged for insurance because of their impairment or condition.

We want the next government to make sure essential markets, such as energy and insurance, have adequate services and support in place to help tackle the problem of additional costs and empower disabled people as consumers.

Tell us what being financially secure means to you

You can read more about our priorities for the next government and how you can register to vote in this election.

What does being financially secure mean to you? Email the stories team at Scope and tell us your experience – stories@scope.org.uk.

You can also join the conversation on social media by using the hashtag #EverydayEquality.