Don't be pushed into over-priced home insulation

Home insulation suffers from service problems, mis-selling and lack of competition, but you can take steps to make sure you get the right insulation and save money on your energy bills.

The Office of Fair Trading (OFT) has published a report into the home insulation market that should be concerning for homeowners looking to make their homes environmentally friendly while saving money.

According to the Energy Saving Trust, loft insulation can reduce energy bills in Great Britain by up to £175 per year. It usually costs from £100 to £350 to install and it will probably take a few years to recover the costs of the insulation.

If you're increasing existing loft insulation, the costs can be the same, but the benefit of additional insulation is reduced, adding several more years before you recover the costs through lower bills.

Cavity-wall insulation might save up to £135 and, again, could cost between £100 and £350. Savings in Northern Ireland for both types of insulation might be a bit higher.

Loft and wall insulation can be installed in a day or even half-day.

It's not all hunky dory

However, the OFT launched a call for evidence in April after receiving a large number of consumer complaints about companies working in the £700m-plus home insulation market.

It also found evidence that there was little competition between insulation manufacturers. Competition is needed to make the price of home insulation worth it.

In addition, it found that manufacturers offer large rebates to domestic suppliers. That will have a controlling effect on those suppliers.

Some respondents to the OFT's request for evidence stated that it was very difficult to get new types of insulation certified and approved, which inhibits competition. This potentially prevents more energy-saving products from being sold.

Get free insulation and free cash

With prices ranging from £100 to £350, it obviously pays to shop around, even if competition is limited.

All the big gas and electricity suppliers offer free cavity-wall and roof insulation, and with most of them you don't have to be an energy customer to get it. However, some are limited to households where an occupant is on specific benefits, and all of them have exclusions and other terms.

EDF stands out as the best deal

Looking at benefits alone, EDF looks like the best, and it is available in most parts of the UK. It offers free insulation to all, but you'll get up to £200 on a prepaid VISA card on top.

You'll get the full £200 if someone in your household gets the state pension credit (not the state pension, to be clear), or child tax credit (with a household income below £16,190), or a number of income-based, disability-based, or child-based benefits, or a pensioner premium. If you have none of those, you'll still get £100 on the prepaid card.

You might want to cancel the card as soon as you've spent the money, as it will have lots of different charges.

You can get details of EDF's scheme here. British Gas offers free insulation for all its customers, new and existing. The other big suppliers offer free insulation to customers on child tax credits or pension credits.

If you're a tenant, you could ask your landlord for written permission to apply for the insulation.

Be ready for the hard sell

If you go for free insulation with one of the energy suppliers, be prepared for them to sell your more services, such as loft clearing and floor-boarding.

These are not likely to be cheap, so always consider alternatives, such as shopping around or doing it yourself. Never sign up on the spot when someone comes to your home, no matter what pressure or incentives they apply to you.

Get a grant for installation

An alternative, if you can't stomach the energy suppliers, is to consider Government grants. These could pay for some or all of the insulation, as well as other energy-saving measures.

Grants in the four nations of the UK come from:

Warm Front scheme in England

Energy Assistance Package in Scotland

Nest in Wales

Warm Homes scheme in Northern Ireland

These grants are generally available to older people or people on income or child-related benefits.

Local authorities provide their own grants too, which might not always be limited in the same way as the other regional grants, so check them out. You could even use local authority grants for the fitting and buy the insulation yourself.

Check small and large suppliers

Check out what a few local one-man bands will charge you, not just the larger private companies. You can often use grants to help pay for them. Again, don't sign up immediately to any services immediately after they survey your property, regardless of what they say.

Tell them you'll take time out alone to think about it. This will help you avoid mis-selling, which is a problem that came up in the OFT's report.

Take steps to ensure quality service

Whoever you sign up with, before they start work, get it in writing that the work is free, that they will respect laws, regulations and safety requirements, that they will respect the home and leave it in the condition it was in beforehand, and that there will be no extra costs other than those agreed. Take photos of the home before the work begins as a record, and email the photos to the installers.

Doing all this will not only help you compare prices, but it could deal with another problem the Office of Fair Trading came across, namely that some customers aren't always offered the best type of insulation for their homes.

More tips on getting insulation fitted

Make sure any work done is charged at the lower rate of VAT for energy-saving measures, which is 5%.

After getting insulation installed, turn down your heating a little to maintain the same temperature and benefit from savings.

More on energy:

Compare energy quotes

How to get free cavity wall and loft insulation

First Utility launches UK’s cheapest energy deal

How to complain about your energy supplier

Are fixed gas and electricity deals cheaper?