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Households across the country will be dismayed about the latest increase in the energy price cap, which will see annual bills rise to £1,862 in July for a typical user.
Here, we explain what you might be able to do to reduce energy bills and whether you might be eligible for government support to help with energy costs.
Generating your own power for your home could provide one way to help keep bills down, although it often involves a significant financial outlay for installation and upkeep, so this isn’t a route everyone will be able to afford. Even if you can, it may take a long time for you to really feel the financial benefits, so this definitely won’t be a quick fix solution.
Interested in solar panels?
Why are energy costs rising?
Energy bills are going up because the wholesale cost of gas has increased in recent months due to the ongoing conflict in the Middle East and because the cost of transporting energy has risen.
Tim Jarvis, Ofgem CEO, said: “The latest price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy.”
What does this mean for my energy bills?
If you’re approaching the end of a fixed rate energy tariff, or you’re currently on your provider’s default energy tariff, you should shop around and move to a new fixed deal to keep costs down ahead of July’s price cap change. Read more in our article Should I fix my energy prices?
If you’re considering switching your energy provider, it’s worth doing plenty of research so you can be certain you’ve found the best possible deal to suit your needs. Comparison websites such as MoneySuperMarket, Uswitch and Compare the Market enable you to compare the latest energy tariffs, whether you’re looking for a fixed or variable deal.
If you think you’re going to struggle to cover costs, talk to your supplier as soon as possible. They often have support schemes available to help those on the lowest incomes, or may be able to negotiate a repayment scheme that’s affordable.
How have energy prices affected the energy price cap?
The energy price cap limits how much suppliers can charge consumers for their energy usage. The cap is set by Ofgem, who review and update it every three months (previously every six months) to reflect factors like wholesale energy prices and distribution cost.
The price cap is currently set at £1,641 a year for the average household and will rise to £1,862 from July.
The actual amount you’ll pay will depend on how much energy you use, so those living in bigger homes or properties that aren’t energy efficient could pay much more than the cap per year, whilst those using less energy will have lower bills.
Find out more about how the price cap works in our guide What is the energy price cap?
Can I get help with my heating costs?
If you think you’re going to struggle to heat your home this winter because you won’t be able to afford your energy bills, it’s worth checking whether you may be eligible for some financial support. For example, if you were born before 22 September 1959 and your annual income is lower than £35,000, you should qualify for the Winter Fuel Payment, which is a tax-free payment to help with the cost of winter heating bills. Find out more in our article Winter Fuel Payment: who is eligible, and how can I claim?
You might be able to get money off your energy bills this winter under the Warm Home Discount Scheme, but you’ll need to be on a low income and claiming means-tested benefits to qualify. This is a one-off discount on your electricity bill, paid directly to your energy provider on your behalf between October and March. The scheme will reopen in October.
You may be eligible if you:
- are receiving the Guarantee Credit element of Pension Credit and your electricity supplier is part of the Warm Homes Discount scheme. In this case, you should get £140 automatically deducted from your bill between September and March.
- are on a low income, already receive certain means-tested benefits and your electricity supplier is part of the Warm Homes Discount scheme. If you think you might be eligible, contact your electricity supplier in the first instance and they will be able to give you more details and confirm if you are eligible.
- are on a pre-pay or pay as you go electric meter. You will need to speak to your electricity provider to find out how to activate your deduction.
Find out more about help you might be able to claim for in our guide Are you eligible for help with heating costs?
If you’ve explored all of these options and are still struggling, your council may offer a local welfare scheme for families and individuals who are struggling to meet basic costs. The Household Support Fund is provided by the government to councils for this purpose. Contact your local council to see if you might be available for support. You can read more about this in our article The Household Support Fund Explained.
If you’re struggling with energy debt, you might be able to apply to your supplier for support. Find out more in our article Is your energy supplier offering grants to pay off energy debts?
Are there any other ways I can keep energy bills down?
Making your home as energy efficient as possible can help reduce your energy costs as well as your carbon footprint.
For example, according to the Energy Saving Trust, you can save around £35 a year just by remembering to turn your appliances off standby mode, whilst cutting back your washing machine use by just one cycle per week can save you £8 a year on energy.
It’s also worth checking how long you heat your water for each day. Many people have their hot water on for much longer than they need, bumping up their energy costs. Hot water cylinders usually hold the heat for hours, so you should only need to heat your water for an hour in the morning and an hour in the evening to ensure that you have plenty of hot water when you need it.
If your home is poorly insulated or doesn’t have a working central heating system, there may be improvements that can be made to your home via insulation and heating schemes which provide funding to make properties more energy efficient.
You can use the links below to find out more about schemes that may be available to you depending on where you live:
- England – The Simple Energy Advice website
- Scotland – Home Energy Scotland
- Northern Ireland – Energy Saving Grants in Northern Ireland
- Wales – Nest Scheme
Learn about other ways to keep your energy costs down in our guide Save money on your energy bills.
As mentioned earlier, generating your own energy could help you keep bills down over the long term. You can read more about this in our article Can I generate my own energy?
Find out how much you might be able to save using the button below.
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