A new plan has been launched by the governmet to help 125,000 households reduce their energy bills.

The chancellor announced the boiler scrappage scheme in the pre-budget report. The plan will reduce energy bills as well as reduce carbon emissions and secure a number of jobs.

With this scheme, households which currently have a boiler with an energy efficient rating of G will be able to apply through the Energy Saving Trust for a voucher. This would entitle them to £400 off a new A rated boiler. Households will also receive a discount off a biomass boiler or heat pump.

The government’s energy and climate change secretary, Ed Miliband, said:

“The boiler scrappage scheme will save around £200 off heating bills per year for families that are replacing their old boilers, and in total will save the same amount of carbon equivalent to taking around 45,000 cars off the road.”

It is estimated that most households could save somewhere between £200 and £235 a year.

Installing a new boiler is only one way to save money on energy bills. Think Money recommends comparing and switching energy suppliers.

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One of the best ways to avoid falling behind on your energy bills is to use an online comparison to switch gas and electricity suppliers, according to Think Money.

Think Money recommended carefully checking the details of the deals which you see offered before choosing the one which is cheapest and best for you.

The National Housing Federation’s recent survey found that as many as seven million households in the UK could be living in fuel poverty due to high gas and electricity bills. When a household spends ten per cent of their income on the energy used to power their home, this could mean fuel poverty.

A good way to ensure you are paying the correct price for your energy usage is to take regular meter readings.

Think Money said: “Keep in mind that most providers offer a discount on fixed direct debit payments, so if you’re looking to save money, it might be worth making the switch.”

Other tips include budgeting your money to make sure you can cover your average energy usage, which will cover your higher winter bills, and adding a little extra to your bills each month to help build up credit on your account.

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According to the National Housing Federation (NHF), seven million people are living in fuel poverty this winter due to high gas and electricity bills.

The housing charity’s new survey shows the latest figures suggest three million more people are living in fuel poverty than the government estimated. Many people are not heating their homes properly because they are concerned about the cost.

Fuel poverty is any household that spends ten per cent or more of their income on gas and electricity.

Chief executive of NHF, David Orr, said: “The spiraling cost of energy and the impact of the downturn mean heating our homes has become a luxury rather than a basic necessity – particularly for the elderly, low paid and unemployed.”

Over 60 per cent of people are “worried” about paying their gas and electricity bills, according to a YouGov poll undertaken in conjunction with the NHF research.

A recent article in the Times suggested that customers who took out a fixed energy tariff when wholesale prices were high could save money by paying the cancelation fee and shopping for a cheaper deal online.

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Winter requires extra amounts of heat and light for the homeowner. Bankrate.com has some helpful tips on helping you lower your energy bills, if followed.

Some of the obvious ways to save energy are already much used by a lot of consumers. For instance, turn off lights when leaving a room, using the washing machine only when it is full and take short showers.

However, there are also ways to cut energy bills that are less well-known, but will still have a great impact on your budget.

The first thing consumers can do is switch to a programmable thermostat, according to this online financial expert. A programmable thermostat allows you to use the pre-determined timer setting to lower the amount of energy used when it is least required, such as the middle of the night.

One of the best tips and the best ways to save money is to switch to energy-saving lightbulbs. These are more expensive than normal lightbulbs, but these alternatives will result in a noticeable drop in energy used on every monthly bill.

Another thing consumers can do is to unplug all appliances that are not in regular use, such as televisions, microwaves and washing machines, because all of these waste power even on standby.

Consumers can arrange for an energy audit, where a expert will visit the property and assess what more can be done to drive down consumption. Rebates, schemes and incentives are also offered by energy suppliers.

It is also a good idea to compare energy providers, to make sure that you are getting the best deals for you.

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According to a new report by the Cooperative Bank, UK consumers are investing more money in energy efficient technology. The report found that in 2008 spending on energy efficiency products reached nearly £400 million, which breaks down to £155 per household.

Energy watchdog Ofgem figures show that people could save over £100 a year by switching gas and electricity suppliers, which would then just about cover the cost of household spending on energy efficient products.

Items included in the list of energy-efficient products were boilers, light bulbs and batteries. Changing to energy-efficient products can lead to cheaper gas and electricity bills, as well as reducing carbon emissions.

Chief operating officer at the Cooperative Bank, Tim Franklin, said: “In order for the UK to reduce its carbon emissions by 30 per cent by 2020, there will need to be a step-change in take-up of low carbon technologies, and this will need a new contract between business, government and the consumer.”

He also said that the results provided evidence that the UK was working towards a greener lifestyle.

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