Worried your energy supplier is about to go bust? Or thinking of switching as prices soar? CSE’s top tips on what to do next
22 September 2021
Heating your home isn’t cheap and with the price of gas, electricity and oil going up all the time, it seems to cost more every winter to stay warm. Meanwhile, energy security alarm bells are ringing this week as the news is filled with gas shortages, price increases and energy suppliers going bust.
Why are bills going up so much?
There is no short answer; it’s a complex issue. Wholesale gas prices have gone up by a record 250% since the beginning of the year, including a 70% rise since August. There seems to be four main factors; some recent limits to gas supplies from Russia; an upturn in global gas demand as economies reopen after Covid-19 lockdowns; a cold winter last year which prompted higher gas demand and reduced the amount we have in storage; and lower wind speeds this autumn which mean more energy has been generated with gas rather than wind.
Save energy where you can
If your home is uninsulated and draughty and if your appliances are inefficient, you could be wasting energy and money and your home could be less warm. However, there are some simple steps you can take to improve energy efficiency and save money.
The first thing to do is to make sure you’re not wasting any energy. Making changes that cost very little are some of the best ways to protect yourself from increasing gas prices. CSE has energy saving tips that can make a surprising difference.
- Turn your heating down by one degree. You won’t notice the difference and could save up to £80 a year. Don’t go below 18°C if you are elderly, ill, or have small children.
- Be a friend to your freezer. Defrost it regularly and keep it as full as you can. A defrosted freezer costs around £150 less a year to run.
- Use a smart meter or energy monitor to keep an eye on energy usage, you can then use this information to make changes and see what difference you can make to your bills.
- Draught- proof your doors, letterbox and windows and draw your curtains at dusk to keep the heat in. You’ll save around £30 per year by draught proofing windows and around £20 per year draught proofing doors.
- Don’t leave appliances on standby, switch them off when not in use.
Finding the cheapest tariff
Usually this would be one of our first recommendations for anyone wanting to save money on their bills. Normally the standard variable rate tariff (SVRT) is the most expensive way to buy your energy. CSE recommends you switch supplier and fix your deal to get the cheapest energy. However, the SVRT is subject to Ofgem’s price cap, so there will be a point when wholesale prices push fixed rate deals up above the SVRT. Ofgem has a list of approved energy switching sites here.
If you are worried your existing supplier is going to go bust, our advice right now is to sit tight and see what the government says it will do on the price cap.
Is there anything to help with my energy bills?
Yes. There’s something called the Warm Homes Discount scheme. You could get £140 off your electricity bill for winter 2021-22 under the scheme if you meet the eligibility criteria. The money is not paid to you - it’s a one-off discount on your electricity bill, between October and March.
There are two ways to qualify for the Warm Home Discount Scheme:
- You get the Guarantee Credit element of Pension Credit - known as the ‘core group’.
- You’re on a low income and meet your energy supplier’s criteria for the scheme - known as the ‘broader group’.
If your existing energy supplier is obligated for the Warm Homes Discount (see list here), then your new supplier will be legally obliged to fulfil their Core Group requirements. So if you get the Guarantee Credit element of Pension Credit, then you should still get £140 off your bill. You won't be automatically entitled to the broader group, so you would need to apply with your new supplier.
The Warm Homes Discount Scheme opens on 18 October 2021.
Reaching net zero
Looking more broadly, the way we produce and use energy is unsustainable. Moving away from fossil fuels like gas is one of the biggest challenges facing the UK but by no means impossible. Saving energy at home is an important step people can make across the country, but we also need urgent support from government towards home and building insulation. Insulating buildings well will reduce the amount of heat needed. Once this has happened, we can look towards heating buildings using low carbon options like heat pumps, or in dense urban environments, heat networks.
This price increase on energy bills is hitting at the worst possible time, just before winter, when millions of people are already struggling to pay their bills, winter approaches and people are spending more time at home either on furlough or homeworking. CSE is one of the UK’s leading sustainable energy organisations supporting people with cold homes and high energy bills and working towards a world where sustainability is second nature, carbon emissions have been cut to safe levels and fuel poverty has been replaced by energy justice.