Is there anything I can do to save money on my energy bills?
Last month, Ofgem announced the energy price cap rise. The price cap is controlled by Ofgem, the energy regulator, and it’s reviewed every six months. Ofgem announced on 3 February that the energy price cap for the period 1 April 2022 to 30 September 2022 will see an unprecedented rise. This will mean a household with typical consumption paying by direct debit will pay £1,971 a year, an increase of £693 – £54%. For customers on prepay meters the cap also increased to £2,017.
The typical consumption values were last set pre-covid, so may not reflect higher usage if consumers are still at home more, for example working from home. This is on top of the increases consumers faced last year which took the price cap to its highest ever level of £1,277 for the average household.
Citizens Advice and Energy Saving Trust have teamed up to explain why bills are increasing, what steps people can take to save money and what support is available to anyone who is struggling. While these steps won’t be enough to cover the steep rise in bills that many people will face, they could make a small difference.
Why are my energy bills going up?
The main reason why energy bills are rising is because global gas prices are at record levels – this means it’s more expensive for energy suppliers (the people we pay our bills with) to buy the gas and electricity we use every day. Inevitably, these costs get passed on to us – the consumers – in the form of higher bills.
These increased costs haven’t been passed through to us straight away because of the price cap. This puts a limit on how much suppliers can charge us for our gas and electricity.
Your bills will only be affected by the price cap increase if you’re on a Standard Variable Tariff. If you’re on a Fixed Rate Tariff, your bills will stay the same until your contract ends. If you’re unsure what type of contract you’re on, check your bill or call your supplier to find out.
In the past, it would have been a good idea to switch to a new energy supplier or ask your current supplier for a better deal. But at the moment, many people are sticking with Standard Variable Tariffs because there aren’t a lot of better deals to switch to. This may change once the new price cap comes into effect.
My energy supplier collapsed last year – has this made a difference to my bills?
The rise in wholesale prices also led to a lot of suppliers going bust. If you’re one of the millions of customers affected, Ofgem will have moved your account to a new supplier. It’s likely you were put on a Standard Variable Tariff, which could be more expensive than the tariff you were on with your previous provider.
Is there anything I can do to save money on energy?
There are some simple things you can do to save some money on your energy bills. They won’t cover all the extra costs, but they can make a difference:
Check your thermostat: Turning your thermostat down by just one degree can save you around £65 a year. Only lower it to a temperature you feel comfortable at – as a guide, many people find this is between 18-21 degrees.
Keep the heat in: Check your home for any gaps in the doors, windows and floors. Blocking any holes where you could get a draught could save you around £30 a year. If you’re renting, ask your landlord to ensure your home has good insulation.
Turn off anything you’re not using: Turning your appliances, like TVs and washing machines, off instead of leaving them on standby could save around £40 a year. Turning off lights when you’re not using them – even if it’s just off for a few seconds – could save £14 a year. Consider using LED lightbulbs, which cost less to run.
Watch your water usage: Cutting your shower time by just one minute can make a difference. If everyone in a four-person household with a water meter did this, you could save £45 a year.
For more tips on saving energy, visit the Energy Saving Trust website.
What support can I get?
If you’re struggling to afford your energy bills, you might be able to get support from the government or your energy supplier. The first step is to call your supplier and ask them if they offer any grants to help with your energy bills.
You may be eligible for these benefits:
Warm Home Discount: This gives you £140 off your electricity bill if you’re on a low income. If you get the guaranteed element of pension credit, you should get the discount automatically. Check with your supplier to see if they offer the Warm Home Discount because not all of them do.
Winter Fuel Payment: This is an annual one-off payment to help you pay for heating during the winter. You can usually get a Winter Fuel Payment if you were born on or before 26 September 1955. If you’re eligible, you should get this automatically. However, if you think you’re eligible and have not been receiving it you can contact the Winter Fuel Payment Centre (Telephone: 0800 731 0160 / Textphone: 0800 731 0176)
Household Support Fund: In England, your local council might give you vouchers to help pay for day-to-day essentials. This is known as ‘welfare assistance’ or the ‘Household Support Fund’. Each council runs their own scheme. The help on offer and who can get it varies. Find your local council on GOV.UK and ask them about it. You don’t have to be in receipt of benefits to get this support. If you live in Wales, contact your local authority.
Even if you’re not eligible for grants, suppliers still need to support you to manage your payments based on what you can afford. Depending on your circumstances, they may also offer you a referral for independent debt support or energy efficiency advice. They may also be able to offer you temporary credit for your prepay meter that you’ll need to repay.
Ian Young, Energy Team Leader for Citizens Advice Consumer Service, said:
“We know this is a stressful and worrying time. We’re encouraging people to consider small ways they can make savings at home wherever possible and make sure they’re getting all the support they’re entitled to. If you’re struggling, worried you might not be able to afford to top up your meter, or having any issues with your energy supplier, don’t hesitate to contact our Consumer Service so that we can help you find a way forward.”