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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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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.

In recent months it’s gas prices that have risen the most. If you can cut back on using gas powered appliances and heating, this is where you can make the biggest savings. Some of our electricity is made using gas, so any way you can reduce your energy usage will save you money.

Here are some quick ideas to help you cut back: 

  • Close your curtains and use draft excluders to stop heat escaping.

  • Use your washing machine or dishwasher at a lower temperature, or run them on the ‘eco’ setting – and avoid putting the washing on when you don’t have a full load.

  • Get into the habit of switching lights off when you leave a room and switching electrical items off instead of leaving them on standby. 

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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.
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Can I save money 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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Can I switch energy if I have a prepayment meter?

If you have a pre-pay meter, you can still switch but currently for most people it will be better to stay where you are as prices are also capped to no more than £2,017 a year if you’re an average user.

If you want, or have to stick with, a pre-payment meter – you can still check to see if there’s a cheaper deal you can switch (Opens in a new window) to. 

If there is, none of the big six will charge to switch to a credit meter which can be cheaper. 

You will probably have to undergo a credit check and your energy account will need to be debt free.

 

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Energy efficiency grants

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Fixed price energy tariff vs variable rate energy tariff

Fixed rate energy deals are looking expensive when compared to sticking to your supplier’s standard variable rate, as standard variable rates are being protected by the price cap of £1,971 a year (£2,017 on a prepayment tariff) for typical usage.

Even the cheapest fixed rate energy deals at the moment are hundreds more per year than the current price cap. 

It’s likely the price cap will rise again this autumn, but it’s difficult to estimate how much it will increase by yet. 

Although the choice is still there to switch onto a fixed deal, bear in mind you could be stuck paying more than the price cap, and might be charged a fee if you want to leave early. There are no fees for leaving the standard variable rate.  

In the past it was a good idea to be on a fixed rate deal as they were significantly cheaper than a supplier’s standard variable rate. The market is changing quickly, so it's important to keep checking the tariffs available to you to make sure you're paying the best price.

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What if my fixed deal is coming to an end after the price cap increases?

When your fixed plan ends, your supplier will put you on their standard variable tariff. With the high energy prices we’re facing at the moment, this will be the Ofgem price cap. This will limit the amount you pay.  

If you're near the end of a fixed plan, you won't have to pay a fee to leave it and move to a new tariff – provided your switch completes within the last 49 days of your current deal.

Fixed energy tariff

With a fixed price energy tariff, you won’t be affected by price hikes during the contract. There are currently no fixed rate tariffs that are cheaper than the price-capped standard variable rate.

If you do choose a fixed rate tariff and, energy prices fall, you will still be paying the old, higher rate until the end of the contract.

If you want to switch again before it ends some fixed tariffs have exit fees, which you’ll need to pay to leave. 

Getting a fixed tariff also doesn’t mean you’ll pay the same amount for each bill. It’s the tariff that stays the same and your energy bill will rise and fall with your usage. 

Variable energy tariff

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For most people a standard variable rate tariff is probably the best choice, your bills rise and fall based on what’s happening in the energy market. If energy prices drop so will your bill, and if they rise, you’ll need to be prepared to cover higher costs, up to the price cap.

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 though this isn’t usually the case, the energy price cap on your supplier’s standard variable rate is likely to be nearly the cheapest deal available at the moment.
  • It’s not a cap on the total price you pay, but a cap on the rate that will be charged – the figures mentioned are for households with typical energy use, your bill could be lower or higher.
  • Not all energy tariffs are price capped.
  • In April 2022 the price cap increased for standard tariff Direct Debit customers by £693 from £1,277 to £1,971 per year based on average usage. The price cap for prepayment customers rose by £708 from £1,309 to £2,017.
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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.

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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Is it better to go for a dual fuel tariff or have separate electricity and gas contracts?

A dual fuel tariff simply means you get both your gas and electricity from the same energy supplier. 

Many fixed, online and standard tariffs will offer a dual fuel option.

Many dual fuel tariffs also offer a discount for taking both gas and electricity from the same company.

It can be more convenient to deal with one supplier than go with two separate suppliers for gas and electricity. Sometimes it can work out cheaper but it’s not always the cheapest option. 

Find out more about energy tariffs (Opens in a new window) on the Citizens Advice website.

How to complain about your energy provider

If you’ve got a complaint, contact your energy provider first. Your supplier’s phone number and website will be on your energy bill.

Explain what the problem is and what you want your supplier to do about it. You can use free template complaints letters from the Citizens Advice website (Opens in a new window)

Energy suppliers will then have up to eight weeks to come to tell you about their decision on the complaint.

If you can’t reach an agreement with your supplier after eight weeks, you can ask for a “deadlock letter”, which lets you to take your case to the free Energy Ombudsman.

The Energy Ombudsman will then decide which party it agrees with and how to resolve the issue.

Find out more about  how to make a complaint on the Ofgem website (Opens in a new window)

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