Energy Bills Set to Rise, Here's How to Save Money

Household energy bills are expected to increase significantly in October and again in January, according to forecasts. Regulator Ofgem's price cap, which affects millions on variable tariffs, will see prices rise. However, the total bill will depend on energy consumption, particularly during colder months.

Switching to Fixed Rates

Ofgem suggests considering a fixed-rate energy plan, which locks in the price per unit of gas or electricity. While this offers certainty against future price hikes, it can be challenging to determine if a fixed deal is currently advantageous. If international gas prices decrease due to geopolitical stability, a long-term fix might prove less cost-effective than staying with the variable price cap. Consumer group Which? advises checking for exit fees, which could be substantial if one decides to switch away from a fixed deal before its term ends. Money Saving Expert recommends comparing deals from all available suppliers, not just one's current provider.

Direct Debit Payments

Approximately five million households still pay their energy bills quarterly upon receipt. Ofgem notes that taking regular meter readings or having a smart meter, combined with monthly direct debit payments, can mitigate concerns about estimated usage and potential overcharging. Direct debit payments are generally cheaper per unit than standard credit payments. Customers on prepayment meters, often those on lower incomes, previously paid higher rates but now pay slightly less than the capped direct debit variable rate. Some tariffs also offer cheaper off-peak electricity rates, beneficial for activities like overnight electric car charging.

Financial Support Options

Individuals on low incomes may be eligible for various forms of support. This winter, those on means-tested benefits will receive a £150 reduction on their electricity bill, automatically applied by suppliers, except in Scotland where customers must apply directly. Some may also qualify for Cold Weather Payments, and most pensioners will receive their winter fuel payment. Energy suppliers often provide hardship grants for customers struggling with bills, and the government's Fuel Direct Scheme can assist with repaying energy debt. Resources such as Ofgem, Citizens Advice, and Energy UK offer guidance on available support schemes. Additionally, grants for home insulation and energy-efficient installations like solar panels or heat pumps may be available through local schemes. Consumers are cautioned to be wary of scams posing as official money-saving schemes.

Adjusting Energy Usage Habits

As temperatures drop, maintaining warmth is crucial, especially for vulnerable groups. However, several strategies can help lower bills without compromising comfort. Beyond thicker curtains and draught-proofing, switching off radiators in unused rooms and wearing extra layers are recommended. Money Saving Expert suggests focusing on heating individuals rather than the entire home. Reducing the flow rate on combi boilers can save energy, as water is often heated to higher temperatures than necessary. Batch cooking and using appliances like air fryers or microwaves instead of the oven for small items can also reduce consumption. Opting for shorter showers and washing clothes at lower temperatures (30C instead of 40C) can contribute to savings. Air-drying clothes when possible, or ventilating indoor drying spaces, is preferable to using a tumble dryer. For those considering home renovations or new appliances, choosing energy-efficient models is advised.