Energy customers of some of the UK’s largest suppliers are being urged to reduce their costs now. It comes as industry experts forecast a rise in the energy price cap from £1,568 to £1,762 in October, resulting in an annual increase of £194 for the average dual-fuel household just as winter arrives.
This means that many customers on a variable tariff could face significantly higher bills within a few months, depending on their usage. However, there are ways to start saving now.
Comparison site Bionic has offered some top tips for customers to cut their bills ahead of the anticipated increase. They have also provided their latest advice to help customers decide whether they should fix their bills or not for more price security.
Should I fix my energy bill or not?
If you’re not already on a fixed deal then you’re likely on a variable rate that follows the energy price cap. The price cap itself is not a complete cap on how much you pay.
Instead, it caps standing charges as well as gas and electricity rates.
Those on a variable price cap generally see their prices change every three months. While a fixed deal can provide some price security by keeping the same costs over a longer period, it’s worth seeing if it will actually save you money in the long-run.
Personal finance guru Martin Lewis suggests finding a fixed deal that’s 8 per cent higher than the current price cap. This is because, based on current market predictions and offers, you could potentially save over the year.
Bionic’s business energy comparison expert, Les Roberts, advised: “When it comes to making the switch to a fixed energy tariff, the most important thing to understand is that price-capped tariffs are variable, and the prices change every three months in line with the Cap.
“If you do find a deal with rates below the new price cap rates, then it could be worth considering making the switch as we don’t know what will happen to energy prices in the furure. However, it’s important to remember that price-capped tariffs change every 3 months in line with the Price Cap so a deal that looks good now could end up being more expensive if energy prices drop later in the year.
“It’s also worth remembering that the notice period for ending your current contract differs between suppliers. It’s worth checking your supplier’s requirements before switching.
“If you’re a business owner, remember that there’s no price cap on non-domestic energy contracts. If your current contract is coming up for renewal then it’s worth comparing quotes and fixing your rates to give yourself bill stability and protect against future price rises.”
Current top fixed deals on the market
The following deals could help you save money in the winter if the price cap rises as predicted.
- EDF Energy Essentials – This deal will stay the same as the price cap and is available to both new and existing customers
- Outfox the Market’s Fix’d Dual – Drops to 1% below the price cap and is available to both new and existing customers. However, it’s only available for duel-fual households.
- E.On Next Fixed – 2% over price cap for both new and existing customers.
- Ovo Energy 1 year fixed – 3% more than price cap for both new and existing customers.
- British Gas fixed tariff – 4% more than price cap
- Sainsbury’s Energy Fix and Reward – 4% over price cap plus 4,000 Nectar points for signing up.
- Octopus Energy fixed – 5% over price cap
How customers can lower the cost of their energy bills
Energy audits and smart meters
Mr Roberts added: “By taking part in an energy audit, you’re ensuring that you know exactly where you are using the most energy in your home and how you can cut this down. Similarly, installing a smart meter means you can pinpoint exactly how your home could be more energy efficient. There are no more estimated bills and no need to give your supplier a meter reading, which will save time, money and hassle.”
Reconsider what times of day to use gas and electricity
“Only heating up your home when you need to can be done by simply setting the timer on the thermostat to start the heating at certain times or consider a time of use tariff that offers cheaper rates at certain times. On this point, it may also be worth switching to a time of use tariff or off-peak tariff, where the price of energy will be lower at times when the grid is under less pressure and demand is lowest, which tends to be between 10pm-8am.”
Replace old appliances and use them efficiently
“Older electrical appliances tend to be less energy efficient, so it might be worth upgrading your large appliances, like washing machines and dishwashers if you’ve had them for more than 10 years. More efficient models cut the KwH used significantly, so running costs will be much lower and over time, the money spent on the appliance will be made back in savings.”
Turn your heating or air conditioning down by one degree
“Turning down your thermostat by just 1 degree is a change you probably won’t even notice, especially as we move into warmer months and could reduce your heating bills by as much as 10%. Remember to also adjust your thermostat in relation to the external temperature.”
If you can’t afford your energy bill, what support does your provider have to give you?
Mr Roberts continued: “The most important step to take if you feel you cannot afford your energy bill is to contact your supplier as they are obliged to outline your options, such as organising a payment plan.
“Under official Ofgem rules, your provider must organise an affordable payment plan and as part of this, consumers have the right to ask for a bills review to see if the amount is correct, a break from payments until you can afford to pay, a reduction to an affordable rate, access to advice on how to reduce energy usage or more time between payments.
“Your provider must also give you access to any available hardship funds, charitable grants or help you apply for any available government grants if they have not been automatically applied. One such example is the Cold Weather Payment which is available once the temperature drops below a certain level and you are state pension age or claiming Universal Credit/ Jobseekers Allowance.”
What does my supplier have to do if I can’t pay my bill?
“Your supplier is obliged to give you at least 28 days to repay any debt you fall into before they take action. After this point, your supplier can take steps to install a prepayment meter in your home but they have to give at least 7 days notice.
“However, the prepayment meter should be a last resort. Your provider should first offer you a repayment plan or help to set you up with a repayment plan through your state benefits.
“Do note that if all the above conditions are met and your supplier does supply you with all the above assistance and you still refuse to pay, they do have the right to gain a warrant to enter your home and install a prepayment meter or they could change your smart meter setting to a pay-as-you-go set up.
“Your provider is also obliged to move your prepayment meter to a more accessible location if you are struggling to access it. For example, if you are disabled or have limited mobility and the prepayment meter has been installed out of your reach.”