Number of homes in fuel poverty rises by 1 million

The number of UK households in fuel poverty rose to 3.5 million in 2006, the latest official figures showed today.

The data, released by the Department for Environment, Food and Rural Affairs and the Department for Business, Enterprise and Regulatory Reform, showed an increase of one million on 2005 levels. They include around 2.75 million homes classed as "vulnerable" - those that contain a child, elderly person or someone with a long-term illness.

To be classed as being in fuel poverty, households have to spend more than 10% of their income on gas and electricity. In England, 2.4 million fuel-poor households had fallen into fuel poverty by 2006, of which 1.9 million were vulnerable.

This was 900,000 more households than 2005, of which 700,000 were vulnerable.

The government attributed the rise to a 22% increase in consumer energy bills between 2005 and 2006.

Although the major suppliers cut their tariffs early last year, they increased them early this year, and again in the summer, which could mean the number of homes in fuel poverty today is actually much higher than 3.5 million.

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Do you have cash to burn?

Switching suppliers can save you money but simple things can also help. UK Energy Saving suggests turning off the tap, lowering the thermostat by 1 and filling the kettle with only the water you need.

The Energy Saving Trust will give you a home energy check, which may save you up to £270 a year. For an online report, visit www.energysaving trust.org.uk, or call 0800 512 012 for a paper version.

High domestic fuel prices mean there's one financial certainty this winter - it's going to cost a bomb to keep warm. Shopping around for the best fuel tariff now, however, can give householders the best chance of keeping their energy costs as low as possible.

No amount of home insulation is going to protect you from high bills if you are stuck on an expensive tariff. And come January 2009, it's likely that consumers may face further price hikes from the energy companies so it will pay to plan ahead.

If your budget is already feeling the strain, consider fixing your fuel price for a few years. Capped or fixed-price tariffs work by guaranteeing your monthly or quarterly bills won't rise for a set amount of time. A key drawback, however, is that you won't benefit if prices fall during that time without pulling out of the deal and paying a penalty charge.

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Heating plan attacked by charity

A charity for the elderly says it has received an increasing number of complaints about the government's Warm Front home heating scheme.

This provides money for elderly and vulnerable people to help keep their homes warm in winter.

But the charity Age Concern says it has received more than 5,000 complaints about it in the past year.

These have focused on delays, poor workmanship and the need for pensioners to make contributory payments.

The government is expected to announce extra measures on Thursday to help poor people stay warm in their homes.

Problems

The charity said the government had admitted to MPs earlier this year that funding for the scheme would be cut by a third between 2007/098 and 2010/11, to just £295m.

Meanwhile complaints it had received highlighted other inadequacies.

Among them, pensioners complained they could not afford the top-up payments that were often required, sometimes reaching £2,000, because government grants under Warm Front were limited to £2,700, regardless of the actual cost of the work.

The charity added that the experience of complainers, and others who asked for advice, was that delays to work left some people without heating or warmth in their homes, while others had to pay more for extra work due to poor workmanship.

The charity said that simply putting more money into Warm Front and CERT would not help all those who needed it.

"Wide-ranging reforms are needed to address pricing inequalities which are leaving many of the poorest households paying more for their energy than wealthier customers," said Mr Lishman.

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Lofty plans to keep the nation warm

As Tesco announces a surprise move into the insulation business, Miles Brignall reveals how many of the grants on offer are nothing more than hot air

The supermarket says it will reclaim the cost through the government's recently announced programme of grants to tackle fuel poverty, which now affects 5.4m homes.

However, questions are already being asked about who the real beneficiaries of the programme will be. It has been suggested that when a profit-driven company such as Tesco becomes involved, the installers may be getting more out of it than the "fuel poor". Tesco admits this is a revenue-generating exercise, though it declines to say how much it will receive for each installation.

The main problem is that, in keeping with all the other government-backed insulation schemes, Tesco will not offer the service for free where the householder already has 6cm of loft insulation in place.

The Energy Savings Trust recommends that all households have 27cm of loft insulation. Because it is now almost impossible to find UK homes with no loft insulation, many question the value of the scheme in its current form. Up to 25% of a house's heat is lost through the roof.

A 70-year-old living on state pension would have to pay Tesco £149 to top up her loft insulation if she has more than 6cm in place. And the supermarket won't install anything if your roof has 15cm of insulation - just over half the recommended amount. Also, it has been pointed out by Friends of the Earth and Help the Aged, that these measures do little to help anyone whose home was built before the 30s and does not have cavity walls. They estimate that neither measure is possible in one-third of UK homes.

Add up all these points, and Gordon Brown's claim that up to 11 million low-income households would qualify for free insulation looks distinctly unlikely.

Ever since the government introduced the Carbon Emissions Reduction Target (Cert) scheme, which requires power companies to invest in improving their customers' homes, Guardian Money has been contacted by unhappy readers turned down for extra loft insulation because of the 6cm rule.

The problem has been caused by the way the Cert scheme is calculated. For every home the power companies insulate they save an amount of carbon towards their three-year target. They get three-and-a-half times as many "points" if they can insulate lofts with fewer than 6cm in place.

With shareholders to please, there's little financial incentive for the power firms to top up a pensioner's home from 7cm to 27cm.

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