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Rising Energy Prices – and what you can do to tackle them

10 April 2018 - Posted by TalkAboutDebt

British Gas announced today that its standard tariff prices are soon to rise by 5.5%. The price hike is expected to affect 4.1 million customers throughout the UK, adding around £60 to their bills annually. The rise comes in the wake of another 12.5% increase which came last September.

British Gas are attributing this latest rise to the rising costs of producing energy, but some experts are sceptical of this explanation. Ed Molyneux of switching service Look After My Bills believes that “there is simply no justification for price hikes now”. It looks likely that other providers will follow British Gas’ example, so now is the time to find out what you could do to cut your energy bills down to size.

Tips for Cutting your Bills

With just a few small changes, you can save a huge amount on your bills – this can make a huge difference to your financial circumstances.

  • Consider switching Energy Supplier

You can save hundreds of pounds every year with very little effort just by ensuring that you are with the most cost-effective supplier. Services such as Money Supermarket, Compare the Market, and Uswitch allow you to easily check which supplier would be able to give you the best deal. All you need to do is supply a few details about your home and current energy use, and these sites will suggest suitable providers and tariffs. They will even supply an estimate of how much you will save by switching.

  • Install a Smart Meter

The government aims to have every home equipped with a smart meter by 2020. These devices automatically provide your supplier with meter readings and let you know exactly how much energy you are using – and how much it is costing you. Although a smart meter will not automatically reduce your bills, it can be real help when working out how you could reduce your usage. Many customers report a 1.5-2% decline in their energy use, which can quickly add up to savings. There are currently seven million smart meters in the UK, and many providers will install them for free – it is certainly worth getting in touch with your supplier to ask if they can have one installed.

  • Insulate your Home

In an uninsulated home, around a quarter of heat is lost. This can be significantly reduced by simply installing loft insulation. With modest DIY skills, laying blanket insulation is relatively straight-forward, and a worthwhile investment. You could even be eligible for an energy efficiency grant from the government, to help with the cost of insulation, or even a more efficient boiler.

  • Turn down the Heating

It is an age old tip, but it does bear repeating. Keeping your home just 1°C cooler can save you up to £60 a year. Wearing plenty of layers, and using extra blankets and hot water bottles instead of cranking up the heating can also have a significant impact on your bills. You could even consider going to bed earlier – you are likely to use power most heavily in the night, when it is cold and dark. Going to bed earlier will reduce your energy usage as well as allowing you to benefit from more sleep.

  • Cook Efficiently

Cooking can use a lot of energy, but with just a few small changes this could be greatly reduced. Large batches are the most efficient way to cook food, so cooking several portions at once and freezing portions will allow you to cut your bill. When you have finished cooking, leave the oven door open (if it is safe to do so – children and pets may preclude this option) so that the excess heat warms your kitchen. Using the microwave whenever possible is also a good way to increase the efficiency of your cooking.

  • Make sure everything is turned off

Appliances left on stand-by will cause your bills to creep up. Switching things off at the wall when they are not in use is a small inconvenience compared to paying for the privilege of having devices switch on slightly faster. Making a habit of switching off lights when you leave a room will also quickly add up – as will installing energy-saving bulbs. These bulbs tend to last much longer than their conventional cousins too, meaning you essentially make double savings.

Dealing with Arrears

Hopefully these tips will help you cut your energy bills, but, as the cost of living continues to rise, it is easy to end up owing your supplier money. Utility bill arrears are priority debts, meaning that they should be paid before you worry about other types of debt such as credit cards and personal loans.

If you find yourself unable to pay your bills, or your account falls into arrears, your first course of action should be to contact your supplier. Let them know that you have been struggling, and ask if you can arrange a payment plan based on what you can afford. If you are claiming benefits, you can ask for the cost of any arrears to be taken directly from your payments, and spread over a reasonable period of time.

If you have a number of other debts, it could be worth getting extra help, however. You could consider including utility bill arrears in a Debt Management Plan (DMP) or Individual Voluntary Arrangement (IVA). These solutions allow you to make a single monthly payment towards your unsecured debts based on what you can afford. Since an IVA is a formal solution, all interest and fees on your debts will be frozen, and creditors will cease to contact you. At the end of an IVA, any remaining debt is written off. DMPs are generally more suitable for lower levels of debt, and allow you to pay off what you owe without going through formal insolvency.

If you need extra help with utility arrears, or any other type of debt, speak confidentially to an advisor at Talk About Debt by calling 0808 156 7730.

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