Cutting your energy bills is simpler than you think

Annabel Denham
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INCREASED strain is being put on household budgets after four of the “big six” energy providers announced plans to hike their prices in the upcoming months. Two weeks ago, British Gas said it plans to raise gas and electricity prices by an average of 6 per cent. A few hours later, Npower announced that its gas and electricity prices will increase by 8.8 per cent and 9.1 per cent respectively.

The latest round of price hikes means that just under 20m households will be paying more for their energy. If David Cameron sticks to the commitment he made last Wednesday – to use new legislation to force energy companies to offer their lowest tariff to all customers – it will most likely result in the “big six” all providing a very similar single rate. “This would be hugely detrimental to competition and would stifle choice and innovation. Faced with this prospect, suppliers would end up offering just one tariff and, as we all know, energy is not a one-size-fits-all commodity”, says Ann Robinson, director of consumer policy at

A recent uSwitch survey found that energy costs were the top household worry for consumers (90 per cent). But only a quarter of people had checked with their supplier to see if they were on the best deal. A paltry 16 per cent had changed to another company, according to figures compiled by the Citizens Advice Bureau.

The best way to save money on your energy bill is to use less energy around the home. That is not to suggest substituting central heating with extra blankets or replacing hot baths with cold showers; cutting down on wasted energy can have a good impact on your bills and doesn’t mean you have to do without. The Energy Saving Trust estimates that the average home in the UK wasted £280 last year through not being energy efficient.

A lot of households set their central heating higher than they need it. Every degree that you turn it down could save you around £60 a year on your heating bill, according to the Energy Saving Trust. Figures from Which? show that lighting constitutes a staggering 16 per cent of the average energy bill, so it is cost-effective – and easy – to turn off lights when they’re not being used.

Fitting a tank jacket to an uninsulated hot water cylinder is a good way to stop waste. It is worth insulating any exposed hot pipework around the cylinder and around the boiler at the same time.

Unless your house is very new, it’s likely some heat will be escaping around draughty window and door frames, pipes and loft hatches. Depending on the house, draught-proofing products can cost up to £160, but would result in an annual saving of up to £90.

As much as 25 per cent of the heat in the average home is lost through the roof, which is why the Energy Saving Trust advises insulating the cavity walls and the loft of your home; lagging the loft could save you up to £160 per year.

Homeowners can vote with their feet and save money by switching to a different energy company or finding a new deal. Research from Which? shows that the average saving when switching both gas and electricity is £217 per year. Moreover “there is currently a £300 difference between the cheapest and the most expensive tariffs on the market”, according to Robinson.

Switching suppliers isn’t the only way to get a better deal. Most suppliers have a range of different tariffs that might be better for you depending on your circumstances. Citizens Advice suggests that “if you’ve been with your supplier for more than two years, it is likely that they will have introduced new products that might be of interest to you”. This is why you should contact your supplier to see if they can offer you a better deal.

The way you pay your bill can also make a difference – most suppliers offer a discount for paying your bill by direct debit for example. On average it is £100 cheaper to pay by monthly direct debit than paying cash or cheque, according to Citizens Advice.

Logically, dual fuel (gas and electricity from the same provider) should be cheaper. It often is, but not always. MoneySavingExpert recommends you “compare the cost of the cheapest dual fuel supplier with separate cheap gas and cheap electricity suppliers”, when doing your comparison.

Every time you receive a bill, do a meter reading. You shouldn’t rely on your energy provider’s estimate; these can often be inaccurate. If your supplier is under-billing, you will be left with a large sum to pay at the end of the year. On the other hand, you don’t want your provider over-billing and taking your money unfairly.

If possible, try to avoid pre-payment meters by switching to a billed meter. It may be costly, but more often than not, the savings are definitely worth it.