How to save money on energy bills this winter

Energy prices have been in the news a lot recently. In particular, the rising cost of gas to energy supply companies has caused several small suppliers to go out of business. It will also result in increased prices for customers.

Despite reassurances from the business secretary Kwasi Kwarteng that there is “no question of the lights going out”, many families are worried that rising energy prices will mean stark choices between heating and eating over the winter months. 

But why is this happening?

 In this article we look at the reasons behind increasing energy prices, how this will affect your energy bills, and how to save money on energy.


Why are energy prices going up?

Since the beginning of 2021, wholesale gas prices have increased by a staggering 250%. 70% of this has taken place since August. 

Gas plays a crucial role in the UK energy supply. Around 40% of the UK’s gas supply is used for domestic heating by over 22 million households. Around another 30% is used to generate electricity and a further 11% for industrial and commercial use.

The UK does not store its own gas, it obtains it from various sources including the North Sea and other import partners such as Norway. But now the cost of gas from all these sources is going up. 

There are several reasons for this, including:

  • Increased global demand for gas as economies open up after Covid.
  • The after-effects of increased demand from the cold winter of 2020-2021.
  • Recent calm weather has reduced the level of electricity generation from wind turbines, leading to higher demand for gas to use for this.
  • North Sea gas platforms being closed for maintenance overdue because of Covid.
  • Cables importing gas from France being damaged in a recent fire.

The combination of the above reasons could be described as a perfect storm. Together, they are forcing up the price of wholesale gas, causing many small suppliers to go out of business.

But what does this all mean for you as a consumer?


How will the increased prices affect my energy bills?

Energy prices are regulated by Ofgem. Twice a year – in October and April – Ofgem sets a price cap so that there is a maximum limit on how much your supplier can charge you for a unit of energy. Because of all the above issues, the price cap is due to rise by 12% in October.

If you are a dual fuel customer on a standard variable tariff and paying by direct debit, this will mean an average rise of around £139 a year to a total of around £1277. Prepayment customers will pay more: with average usage around £1,309.

So what can you do to help keep your bills down and save money on energy?


Five ways to save money on energy bills

  • Get the best deal from your supplier

Many people are worried about what happens if their energy supplier goes out of business. If this does happen, your supply will not be affected. Ofgem has a system in place to transfer you to a new supplier, and any credit you have with your former supplier will also be transferred across.

However, once you are with a new supplier, it is advisable to contact them to make sure that you are on the most economical tariff and not, by default, on a more expensive tariff.

This also applies even if you have been with your supplier a long time. Check which tariff you are on and see if there is a better deal going. It is usually more economical to pay by direct debit rather than prepay. Also check whether you could get a better deal from another supplier: check out websites such as Money Supermarket or USwitch to help with this.


  • Economise on heating

Heating is the largest element of our energy bill, especially over winter. But there are ways to reduce your heating bills and still stay warm. 

Thankfully it is possible to stay warm but still manage to cut costs and save money. A key thing to do is turn your heating down by just 1 degree. This should not make a huge amount of difference to the warmth of your home, but can save you up to £80 a year. So it’s good to get all the family into the mindset that if they feel a little chilly they may just need to add another layer of clothing rather than turn the heating up.

There is also a lot of debate about whether or not it is economical to leave the heating on low all the time. The thinking behind this is that as most energy is used when the heating starts up if it is constantly on it will save that. But the latest advice from the Energy Saving Trust is that it is usually more economical just to put the heating on when you actually need it.


  • Switch things off

Try to get everyone into the habit of switching things off at the wall, rather than standby mode, when not in use. When in standby mode, appliances and devices still use energy and it all adds up. It’s estimated that you could save around £30 a year on energy bills just by switching off at the wall. Most contemporary electronic appliances can now be turned off this way without interfering with their programming. 

Also remind people to switch off lights when they leave a room, unless you are planning to come straight back in again. Switching off a light even for just a few seconds can save around £15 on your annual energy bills. 

Also make sure that you use LED bulbs as these are much more economical than traditional bulbs, and also reduce carbon dioxide emissions.


  • Insulate your home

A great deal of energy can be wasted because of draughts in the home. But no matter how high you turn up the thermostat, your home will not be truly warm if there are still draughts blowing through it. So spend time checking for draughts in your home, for example around doors and windows, gaps in the floor, or through the chimney. Then do what you can to block up where the draughts are coming from.

It is also worth looking at a range of other energy saving measures for your home, for example loft insulation, cavity wall insulation or solar panels. The Energy Saving Trust provides more information about such measures. Some may also be eligible for government grants: for details see the Gov UK website.


  • Ask for help if you need it

If you are struggling to pay your energy bills despite trying all the above, then do ask for help. The first thing to do is to contact your energy supplier to explain the situation. They are bound by Ofgem rules to understand your situation and work out a fair way forward with you that takes into consideration what you are able to pay and when. 

Also be aware of some government initiatives that may be able to provide additional help:

  • Winter Fuel Payment – a payment of £100-£300 for fuel for people born on or before 5 October 1954. 
  • Cold Weather Payment – a payment of £25 for every week of very cold weather between November and March. 
  • Warm Home Discount – a discount on your electricity bill of up to £140 for people on certain benefits.


We hope that the above information helps you to understand why energy prices are rising, how this will affect your energy bills, and how to save money on energy.

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