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How to save money on gas and electricity bills

Best ways to save on gas and electricity

Energy bills can be expensive, but there are a few things you can do to keep your costs as low as possible.

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Should I switch to a fixed deal?

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Energy prices are rising. The government introduced a cap on energy costs of £1,277 a year on October 1, but this cap will be reviewed in April 2022 and could go up. This means a rise of £139 a year if you’re on a standard tariff and £153 if you’re on a pre-payment meter.

Ordinarily, a fixed rate tariff can be good for the below reasons. But now, with energy prices so high, there are no cheap fixed deals available for new customers. This means it’ll probably be cheaper for you to stay on the standard variable rate because prices for the average customer will be capped to £1,277 per year (£1,309 if you're on a prepayment meter).  

If you're already on a fixed rate deal, you will automatically be moved onto the standard variable rate when your deal comes to an end. 

Below are some of the reasons why a fixed rate tariff can be good: 

  • You know how much you can expect to pay over the time period the tariff lasts (e.g., two years) so it will help you with household budgeting. Getting a fixed tariff doesn’t mean your energy bills will stay the same, regardless of how much energy you use. You’ll pay the same rate per unit. But if you use more units, your bill will be higher.
  • It will protect you if prices rise again during the term of your fixed deal
  • In the event that prices go down you can usually leave the tariff for a small exit fee (sometimes even for free) and switch to a cheaper deal

If you do decide to switch away from your current energy supplier, the process is easy.

For more information on switching if you are a prepayment customer, see the section below What if I have a prepayment meter?

It doesn’t matter if you rent or own your home. As long as you pay for your own gas and/or electricity, you should be able to switch.

If your landlord pays for your energy, they have the right to choose the supplier. Some tenancy agreements might have clauses about switching. But if you pay for your energy, you should be able to decide who to get gas or electricity from. 

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Pay by Direct Debit

It’s usually cheaper to pay by Direct Debit and means you won’t have to worry about missing payments.

Use less

It sounds obvious, but the less energy you use the lower your bills will be.

There are plenty of tips and tricks you can use to cut your use. We’ve listed some below.

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Make your home more eco-friendly

Better insulation, a new boiler, solar panels. There are lots of options out there which could help you save up to £250 per year. You might qualify for a government grant

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Make your home more energy efficient

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Spending a little to save a lot is a good investment – especially if you don’t have to spend your own money.

There are lots of grants available to help with things like:

  • improving your insulation
  • upgrading your boiler and appliances
  •  installing solar panels or other renewable technologies.
  • Even without a grant, some of these investments will pay back what you’ve spent quite quickly. They’ll then start saving you money.

What happens if my energy supplier goes out of business?

While it’s rare for a big energy supplier to go bust, lots of small energy companies have gone bust during 2021.

If this happens, the ‘Ofgem safety net’ makes sure you aren’t left without energy.

The safety net moves you automatically to a new energy supplier, onto a new deal.

The deal is chosen using a competitive process and might be slightly more than your previous tariff. You can end your new deal or move to a different supplier whenever you want.

Find out more about the safety net on the Ofgem website

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What if I have a prepayment meter?

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A prepayment meter works like a ‘pay-as-you-go’ tariff for gas or electricity. You need to pay for energy before you can use it.

That means putting money directly into your meter, using an electric or gas meter key, tokens or, in some cases, topping up online.

The main benefit of prepayment meters is that you won’t spend more than you have. But it’s also one of the most expensive ways of buying energy.

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My energy supplier wants to install a prepayment meter

If you’re in debt to your supplier, they might decide to install a prepayment meter in your home.

But you can refuse it if it would be difficult for you to go to the shops and top it up. You can also refuser if the meter would be difficult to access due to a disability, or if you’re elderly.

If you need extra support when dealing with your energy supplier, for example because of physical or mental health conditions, you can sign up to use the Priority Services Register (PSR).

This offers you free support to help you work through any problems with your supplier.

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Can I switch energy if I have a prepayment meter?

Yes, many energy suppliers have a prepayment tariff. So you can compare these and pick the cheapest.

All you need to do is choose a price comparison site on the Energy Compare website and tell them you have a prepayment meter. It’s best to use more than one comparison site, as they don’t all show the same suppliers.

You’ll then be shown a list of prepay gas and electricity deals you can switch to.

You won’t be getting the cheapest deals available on the market, but you still might be able to save money on your bills.

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Switching to a standard meter

Prepayment meters are one of the most expensive ways to get energy. So it’s worth asking your supplier if you can switch to a standard meter.

Your supplier might ask you to pay for your meter to be changed or to have to meet certain conditions – such as not being in arrears for a period of time.

You might be able to save hundreds of pounds a year by moving to a standard meter and switching to a better deal. So it’s definitely worth asking.

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Energy efficiency grants

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Fixed price energy tariff vs variable rate energy tariff

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With a fixed price energy tariff, you won’t be affected by price hikes during the contract.

However, if energy prices fall, you will still be paying the old, higher rate.

Some fixed tariffs have exit fees, which you’ll to pay if you want to switch again before it ends.

Getting a fixed tariff doesn’t mean your energy bills will stay the same, regardless of how much energy you use.

You’ll pay the same rate per unit. But if you use more units, you’ll spend more money.

With a variable rate tariff, your bills rise and fall based on what’s happening in the energy market. But if energy prices drop so will your bill.

Energy price cap explained

An energy price cap means that energy suppliers won’t be able to charge more than the capped price that applies to their standard energy tariff.

The energy price cap only affects you if you live in England, Wales or Scotland. In Northern Ireland your energy prices are governed by the Utility Regulator (instead of Ofgem). Find out more about the help available to you for paying your energy bills on the Consumer Council website

It won’t apply if you:

  • are already on a fixed-term energy tariff (although it will affect you when your tariff ends)

  • have chosen a standard variable green energy tariff that Ofgem has exempted from the cap.

Be aware that:

  • even with the cap, you’ll probably still have to switch to make the biggest savings – use our switching tips to get the best deal
  • it’s not a cap on the total price you pay, but a cap on the rate that will be charged
  • not all energy tariffs are price capped
  • the cap varies depending on where you live in with the UK – from 1 October 2021 the average cap per year will rise by £139 to £1,277 for the average standard tariff – and by £153 to £1,309 if you’re on a standard prepayment meter
  • the price cap will be reviewed in April 2022, so it could go up again.
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Switching gas and electricity suppliers – the basics

Changing energy supplier is easier than ever and can save you hundreds of pounds on your energy bills.

The whole process shouldn’t take more than 21 days and you won’t be cut off at any point. The only change you’ll notice is a new supplier sending you bills (if you switch supplier) and lower rates if you have found a cheaper supplier.

If you get a Warm Home Discount, make sure the supplier you’re switching to offers the discount. 

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If you decide to switch, you’ll need a recent energy bill (or annual energy statement) and your bank details.

Your energy bill has details about your current energy plan, including how much you use and the name of your tariff. If you don’t have a recent energy bill, you can contact your current supplier for this information.

Step 1 - Choose a comparison site

Price comparison websites help you compare the different energy deals available and they’re a great way to see what’s available.

They don’t all work with the same suppliers, so use a few to make sure you don’t miss out on the perfect deal.

We suggest using sites that Ofgem recommends and that have been accredited with the Confidence Code. That’s because these sites will:

  • help you find the best deal for you in your local area
  • provide a free and easy-to-use switching service
  • give detailed information on each tariff, including gas and electricity unit prices
  • have details about any discounts available.
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Step 2 – Switch

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When you’ve picked a few price comparison websites to use:

  • Put your details into the price comparison sites.
  • Look through the results and choose the energy plan that best suits your needs.
  • Don’t forget to look at more specialist tariffs, such as Economy 7. This charges you much less for electricity you use at night. So if you use storage heaters, dishwashers, slow cookers or washing machines off-peak, you’d save money.
  • Your new supplier will arrange the switch and will ask you to provide meter readings.
  • Your previous supplier will send you a final bill.

That’s it – you’re done. The whole process shouldn’t take longer than 21 days.

Help if you’re sent a catch-up bill for energy – energy backbilling

Sometimes you might be using more energy than the amount your energy supplier thinks you’re using.

This is more of a problem if you’re on a Direct Debit, or don’t send your meter reading to your energy supplier regularly.

If you’re on a fixed payment instalment plan and are using more energy than you are being charged for your supplier might send you a catch-up bill. This is a bill for the extra energy you’ve used above the amount you’ve paid for.

If you’re switching, you could be sent a catch-up bill. This will depend on how accurately you’ve been charged for your energy use.

Energy backbilling sets out rules for sending you catch-up bills. They can be for any amount but can’t be for energy used more than 12 months ago.

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Struggling to pay your energy bills?

Not being able to afford to heat or power your home can be worrying. However, there is help available if you’re struggling.

The government has launched an emergency package with energy suppliers to make sure you can heat and light your home.

It’s important to get in touch with your supplier to ask for help before you miss a payment.

If you’re struggling with money or repaying a debt, options include:

  • reviewing bill payment plans, including debt you might be repaying in instalments
  • payment breaks, or reductions in how much you pay
  •  having longer to repay what you owe
  • access to hardship funds – this is only in exceptional cases.

If you pay for your energy after you’ve used it, you have a credit meter. Credit meters won’t be disconnected during the coronavirus crisis.

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Find out who your gas or electricity supplier is, and their contact details, on a recent energy bill.

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Your energy supplier might have fewer staff available to help you at the moment. Try contacting them online. If you don’t get a reply, it’s worth chasing it up.

If you get benefits, you might be able to pay back money owed to your energy supply using the Fuel Direct Scheme.

This works by automatically taking a set amount from your benefits to pay your debt, plus an extra amount to cover your energy use.

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What happens if I miss a payment on my gas or electricity bill?

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Have you already missed more than one payment and aren’t able to come to an agreement with the provider? Then it’s best to get advice as soon you can, especially if you’ve got other debts as well.

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