Energy prices are going up, but there are steps you can take to protect yourself from higher bills (Image: Getty)
Ofgem has revealed its latest price cap, which determines how much bills can increase for the typical household using both electricity and gas. The continuing conflict in Iran is believed to be directly responsible for a 13 per cent jump from July, representing an increase of £18 monthly, or £221 annually.
While this is frustrating for hard-working Brits, all is not lost. Dan Tremain, energy expert at Compare the Market, has identified several straightforward methods that people can still employ to reduce their energy consumption and hopefully lessen the impact of the rise.
“The upcoming energy price cap rise is likely to increase bills for households on standard variable tariffs from July, while those on fixed deals may be less directly affected,” he said.
As suppliers price fixed tariffs independently, it’s worth comparing current offers against the new cap and reviewing whether switching could provide better value or price certainty. Checking you’re on the right tariff may help limit the overall impact.”
Apart from switching, what else can I do to save on energy bills?
“Alongside switching, there are other ways to potentially save on your energy bills. These could include:
- Checking if your energy supplier offers free electricity: Your energy supplier might offer free electricity at certain times – like British Gas’s PeakSave or E.ON’s Pledge tariff. This could help to reduce your bill without cutting back on usage.
- Adjusting your boiler flow settings: If you have a combi boiler, reducing the flow temperature to 60°C or below could lower your bills
- Turning down your thermostat: Lowering the temperature on your heating by 1°C could have a real impact on your energy bills over the course of a year.
- Using an air fryer instead of an oven: Air fryers are compact so don’t take as long to heat up as ovens. That means cooking times are considerably reduced.
- Running your washing machine in off-peak hours: It can be cheaper to put on a wash late at night through to the early morning when electricity demand and prices are lowest.
- Taking appliances off standby: Turning your appliances off at the plug when they aren’t in use could save you money in electricity.
- Avoiding estimated bills: If you don’t have a smart meter, send regular meter readings to your supplier. That way, your direct debit will be set at the right amount and you’ll pay for what you use.
Experts are forecasting that the cap will increase once more in October, though there is some hope that the US and Iran may reach a peace agreement before then. The present conflict means households are experiencing an increase of 24 per cent on their gas bills and 5 per cent on their electricity bills.
Laura Hinton, an energy expert at MoneySuperMarket, said: “Today’s price cap announcement comes with a change in how energy bills are presented, and it’s worth taking a moment to understand what that means for households.
“The headline figure for how much your energy bill could cost from July might look lower, but that doesn’t automatically mean bills will fall for everyone. In reality, the unit rates, the price you pay for each kilowatt hour of gas and electricity, are increasing. If you use the same amount of energy as last quarter, you could end up paying more from July, not less.
“This is because Ofgem has updated its definition of what a ‘typical’ household uses, which means the illustrative annual bill figure has been rebased. The underlying prices haven’t reduced; the way the average bill is calculated has changed.
“The good news is that some fixed tariffs are currently available, which may offer more certainty over future costs, depending on your circumstances. We’d encourage people to check and compare what deals are available, as fixing could help protect against further price changes. Comparing energy tariffs on MoneySuperMarket.com takes just a few minutes, but it’s important to check the terms carefully to make sure any deal is right for you.”
Current MoneySuperMarket energy deals include:
Ecotricity – EcoFixed – MS 1 Year May 26 v2
Next Fixed 12m Exclusive v1 (£1,628)
Robert Palmer, deputy director of Uplift, explained that moving away from expensive fossil fuels and towards renewables was the ‘only way’ the UK could secure cheaper bills.
He said: “People are fed up with an energy system that sees oil and gas companies rake in billions in profits, while the rest of us are saddled with higher bills.
“This is not the first time we have seen the gas price soar off the back of conflict and it won’t be the last. While we remain dependent on gas, a handful of oil giants will continue to get rich at our expense.
“More North Sea drilling will do absolutely nothing to lower energy bills and only make a minimal difference to energy security. After 50 years of drilling, we have burnt most of the UK’s gas reserves.
“Politicians need to learn the lesson of the last five years – that the only way to insulate ourselves from these risks is by doubling down on renewables and helping more households and businesses make the switch to clean electricity. This is just common sense in today’s world.”
Ofgem chief executive Tim Jarvis said: “Today’s 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.
“We understand many will be concerned about rising prices. While energy use typically falls over the summer months, there are still practical steps households can take to manage costs, including exploring fixed tariffs or changing their payment method. Smart meter customers can also take advantage of half-price or cheap electricity at the weekends.
“While our energy supplies remain secure, the best way to limit this exposure is by investing in our energy network. That’s why we’re unlocking the funding needed for the biggest transformation of our lifetime to deliver a system that is secure, resilient, and works for consumers across Great Britain.”