This article explains everything you need to know about reducing energy costs. You’ll learn to identify the causes of high bills, make changes to cut costs and take advantage of financial support that may be available.
If you’re having difficulty paying your energy or water bills, ask our team about support available to apply for discounts, reduce your usage, compare deals, speak to your supplier and/or refer to a debt advice charity.
Energy bills may be high for a number of reasons. The key is to identify the cause(s) of high bills so you can then take action. The most likely culprits fall into two camps: the persistent drains and the rapid spikes.
These are the predictable expenses to keep the lights on and keep warm at home. It might be costing you a pretty penny, but you have a rough idea what these payments will be each week/month/year. If this is you, start by investigating the fabric of your home. Are your walls and loft insulated? What type of windows do you have? More than two thirds of heat may be lost through these outlets if their thermal performance isn’t sufficient. Unwanted draughts can also make a home feel cold. Check your property’s EPC (if there is one) if you’re unsure about the energy efficiency of a particular feature of your home.
Assuming your home is wrapped in a warm blanket (i.e., double-glazed windows, insulated walls and loft), the next question you should ask is, “how do I heat my home?”. Typically, heating and hot water account for more than half of the money spent on fuel bills. And since gas is currently 3-4 times cheaper than electricity, an all-electric home will generally cost more to run than a home that’s heated with gas. While it’s not always feasible to change heating systems, grants for first-time gas central heating as well as renewable heating – like biomass boilers and ground source heat pumps, may help with capital costs and lead to reduced running costs.
Appliances can also be a big energy draw. TVs, fridges and washing machines now all come with colourful energy labels. As of 1 March 2021, these products (and many others) will be rated on a scale from A to G. (These are replacing the previous A+++ to G energy labels, although some products will still retain the old rating system for now.) The higher the rating, the less costly the appliance will be to run. Lightbulb technologies also vary in terms of energy consumption. Inefficient lightbulbs, like traditional incandescent bulbs, are being phased out in favour of CFLs and LEDs. These newer technologies tend to last longer and cost less to run despite the initial higher upfront investment.
You can also make big savings without spending a penny by simply changing your habits. Trimming energy waste can be as simple as using heating and hot water controls effectively, reducing the amount of hot water consumed and switching off appliances and gadgets at the mains to avoid pesky standby loads.
At the other end of the spectrum are the expenses you didn’t anticipate that appear seemingly overnight. Ask yourself if anything in your life has recently changed. Has your household grown? If your payments are variable, have the seasons changed? Have you recently moved house – and, if so, have you notified your suppliers? Confirm that, if you have moved, you’re not inheriting existing debt from a previous tenant.
If your situation is stable, review your tariff. Fixed tariffs lock in rates for a designated term (typically a year), protecting you from price hikes. (Fixed tariffs, however, don’t mean that your bills will be the same each month – the more energy you use, the more you’ll pay, regardless of fixed unit pricing.) Once a fixed tariff comes to an end, if you do nothing, the supplier will automatically roll you onto another plan, often its standard variable tariff. This type of tariff tends to be the most expensive option available. Check that your tariff hasn’t recently changed and, if it has, find out if there are better options either with your current supplier or with a different provider and switch.
The next step is to review the meter readings. An energy supplier is only required to read your meter once every two years. Relying on estimates could mean that once an actual reading is taken, if the supplier has been underestimating your consumption the whole time, your bills could suddenly jump to make up the difference. A similar issue may arise if an inaccurate meter reading is submitted. Check the figures on your bills and look for an ‘E’ or an ‘A’ next to the number, signifying either an estimated or actual reading, respectively. Smart meters could put an end to estimated readings. Learn more about smart meters here.
Although these are the most likely reasons for bill increases, faulty meters and administrative errors could also be to blame. These require a bit more investigative power so if you’re at all concerned, get in touch with our energy advisors.
Now that you’ve identified the source of your high energy bills, it’s time to tackle the problem. Whether or not you’re experiencing rapid spikes, you can make your home more energy efficient, start conserving energy and take advantage of subsidies to make the bills more manageable.
The most significant boost to your wallet may come from switching tariffs, particularly if you’ve been with the same provider for years without checking for better deals. Your bills will list cheaper available tariffs with your current supplier (if available) but you can also shop around using an Ofgem-accredited price comparison site to compare the whole market. If you have a complicated meter (e.g., E10 and other ‘Time of Use’ tariffs) or heating (e.g., underfloor with storage heaters) or think you may be eligible for the £140 Warm Home Discount, call our Freephone line and speak to an energy advisor who can provide you with information tailored to your needs.
Changing the way you pay for energy and the time of day you use it can also help your bottom line. Energy providers often offer discounts to customers who opt for online accounts, pay by monthly direct debit or have both their electricity and gas tariffs with the same supplier (known as dual fuel payments). If you have a ‘Time of Use’ or Economy 7 tariff or variable renewable energy, like solar panels, take advantage of cheap energy by shifting consumption to coincide with off-peak rates.
If you choose a fixed tariff, which can protect you against future price hikes for the duration of your contract, make it a habit to compare prices before you tariff comes to an end. You won’t be charged exit fees in the last 49 days of your contract.
To ensure accuracy of your bills, provide regular meter readings if you can. If you’re unable to read your meter, you may be eligible to join your energy supplier’s Priority Services Register and request that your meter(s) be read more frequently. You may also want to consider fitting a smart meter that will automatically transmit half-hourly, daily or monthly readings remotely. Smart meters may also help you identify energy guzzlers in your home.
Energy-hungry appliances can include washing machines, tumble dryers, electric showers and fridge/freezers, but you can conserve energy by using these machines sensibly.
Appliances, even when not in use, may still use energy, known as phantom loads. Switch these off at the source when they’re not needed. (Don’t forget the lights!)
The biggest energy sap, however, is often your heating. Start by reviewing your heating controls. You may need to adjust settings throughout the day, especially if you have storage heaters. Timers, Thermostatic Radiator Valves (TRVs) and programmers are invaluable tools, so if you have them, use them. For healthy adults, 18-21°C should feel comfortable. For every degree the thermostat is turned down, you could save about £80 a year. Just don’t overdo it – remember, we have heating for a reason!
Similarly, have a look at the temperature controls on your hot water tank, if you have one. Set the thermostat to 60°C – anything higher will waste energy but anything lower could invite bacteria like Legionella to breed. Using hot water timers (or on/off switches) will also minimise wasted energy and therefore cost, especially if you have a Time-of-Use tariff.
Keep your boiler performing its best by observing routine maintenance of your central heating system, like bleeding radiators and annual boiler servicing. Annual services may spot problems before they cause serious damage (and expense!) but, most importantly, these are often a condition of your boiler warranty.
Draught-proofing is simple, cheap and effective and can help you conserve energy in your home. Sealing gaps around doors, windows, skirting boards, loft hatches, letter boxes and even chimneys will keep warm air in and cold air out. You don’t have to be a DIY expert to use draught-proofing tape, secondary glazing film, chimney balloons or install door brushes. Hanging thick, lined curtains will also help keep the heat in, especially when closed at dusk and tucked behind radiators. Our DIY guides offer instructions on
Be sure that if you take on any of these projects you don’t block essential ventilation (this includes air bricks, trickle vents, exhaust fans and soffit vents). And if you’re a tenant, ask your landlord for permission before starting any work.
If you’re a bit handier, you could also venture into the loft to add insulation, assuming it has easy access and no known damp problems. Your home’s EPC, if available, should indicate how much insulation already exists; current guidelines suggest topping up if you have less than 100mm. Some roofs are more difficult to insulate than others, including flat roofs and rooms-in-roof, so hire a professional for these jobs. You can find one on the National Insulation Association (NIA) website.
Cavity walls can also be insulated by blowing insulation into the cavity through small drill holes. Learn how to tell if your home has cavity walls or solid walls. Find an accredited installer on the Cavity Insulation Guarantee Agency (CIGA) or NIA websites.
Investing in more efficient appliances can also help lower bills. LED lightbulbs are a great alternative to traditional incandescent and halogen bulbs, outperforming even compact fluorescent bulbs (CFLs) in terms of energy efficiency, longevity and quality of light. If you’re in the market for a new household appliance, opt for ones with the highest energy rating, especially if you plan to use it 24/7 (e.g., fridge freezers) or if it has a heating element (e.g., tumble dryers), as these are likely to be power-hungry.
Upgrades to heating can similarly have a big impact on your energy bills. Advances in technology have resulted in modern condensing boilers using up to 30% less fuel than traditional boilers, while high heat retention storage heaters are better insulated and have better controls than their predecessors. For households who are near or on the gas network, and whose sole objective is to cut energy bills, it may be worth considering fitting a gas central heating system, as gas is currently a cheaper fuel to heat our homes. Alternatively, you could consider renewable heating, such as heat pumps or biomass boilers.
Take advantage of schemes that can reduce bills, provide payments for producing energy at home or help with the upfront cost of big purchases.
The Warm Home Discount is a scheme offered by energy providers with more than 250,000 customers, as well as some smaller suppliers who voluntarily participate, that provides £140 rebate to eligible customers. There is a Core Group – those who receive Guaranteed Pension Credit (and were receiving this benefit from a specified date) – are automatically eligible and don’t need to apply. The Broader Group, on the other hand, must apply for the discount every year. Eligibility for this group varies between energy suppliers but is usually based on low income, means tested benefits and a vulnerability in the household e.g. disability or child under 5. If you apply but then switch supplier before you receive the Warm Home Discount, you will need to reapply with your new supplier.
Water companies also often offer customers help with water bills. Southern Water, for example, has a number of tariffs for households on a low income and for customers who require help paying back debt.
Support may also be available for people who find themselves unable to afford to replace a broken appliance. Certain energy suppliers and charities can fund high efficiency replacement white goods such as cookers, fridges, fridge-freezers and washing machines for eligible households. Let’s Talk and Turn2Us are great places to start your search.
Grants or financial subsidies may also be available for large measures, like insulation and heating upgrades. Our energy advisors can guide you through the eligibility requirements and refer you to installers.
Paying the bills can be tough but we can all do our bit to save energy and money through actions big and small.