How to save money on your energy bills

Published  24 April 2024
   5 min read

Energy bills continue to be a big concern for many households, but there may be ways you can save money.

Energy bills - a 'hot' topic

"Energy bills continue to be a topic I’m regularly asked to talk about on TV and radio, and our own research into the cost of living shows that energy bills and energy prices are an ongoing worry for many people.

So, I wanted to take a closer look at how you can make your money go a little further."

High energy bills

Energy bills have fallen from their peak in 2022, but they continue to be high and for some people, are unaffordable¹. The energy price cap, limits the amount that energy companies can charge for energy if you’re on the standard tariff, and it covers 29 million households in England, Scotland and Wales. However, many people are still facing high bills. So how can you save on your bills and who qualifies for help with the cost of energy?


The energy price cap

If you’re on the standard variable tariff then there’s a limit on how much your energy provider can charge you for a unit of gas or electricity, and for the standing (or daily) charge. This is called the energy price cap. From April 1 2024, a typical household on the standard variable tariff, that gets their gas and electricity from the same company and pays their bill by direct debit, will pay £1,690² a year for their energy (the price cap does not apply to Northern Ireland). This is a fall of £238 from January's energy price cap.

Sarah’s tip: The energy price cap doesn't limit how much an energy company can charge you overall, instead it sets a cap on what they can charge for units of gas and electricity, and for the standing charge. How much energy you use and how you pay will affect your final bill.

The ‘typical household’ figures quoted for the energy price cap are designed to give people an indication of energy bill levels. However, the amount you’re charged for energy will still depend on how much energy you use and how you pay. Paying by direct debit means you pay a lower unit rate (and generally a lower standing charge as well); paying by prepayment meter is a little cheaper and paying your bill when it arrives is the most expensive method.

If you pay your bill when it arrives and are on the standard tariff, then the typical household bill under the energy price cap will be £1,796 a year. If you have a prepayment meter, the typical bill will approximately be £1,650 a year.


Finding a cheaper tariff

Since energy prices started rising sharply, there has been little or no opportunity to switch to a new provider to get a cheaper deal. However, energy providers are beginning to offer some new deals. These deals change regularly, but there is no guarantee that they will be competitive for you in your own situation.

If you are happy with the service of your existing supplier but are looking for a cheaper deal, start by asking your supplier if it has a cheaper tariff for you. The rules and regulations say they must give you this information. To switch to a new tariff, you just need to contact your provider and they can arrange it for you. They should also tell you if there are any exit fees, which are sometimes charged on fixed-price energy deals.

If there’s no cheaper tariff for you and you’d like to see what else is on offer, then there are several price comparison sites that will tell you the cheapest deal based on where you live, how much energy you use and who your existing supplier is. The energy regulator, Ofgem, has information on switching and a list of accredited price comparison sites.

You can switch energy providers if you owe money to your current supplier. This is also true if you’re on a pre-paid meter, but only if you owe less than £500 in gas bills, and £500 in electricity bills.

Your new supplier will handle all the admin, and they’ll notify your current supplier. Your energy supply won’t be interrupted during the switch, either. After the switch is complete, you’ll have a 14-day cooling off period where you’re able to switch back if can change your mind.


Think it through before you switch

Before you switch, there are a few things to consider. It’s worth finding out about the service rating of a supplier before you switch to it. Saving money on your energy bill is always welcome, but not if you have to spend hours on the phone or online trying to get an accurate bill. The Citizens Advice website has a league table that compares energy suppliers' customer service, which is regularly updated.


Claim a credit refund

If you pay for your energy by monthly direct debit and you don’t have a smart meter or send in your readings every month, you may be in credit. You can ask for a refund, providing you give your energy provider an up-to-date meter reading, but you may not get a refund of the full credit amount. Some suppliers require you to have a certain amount in your account and may increase your direct debit payment if you insist on a full refund. Find out more about claiming back credit from your energy supplier on the Citizens Advice website.


Using less energy

If you can’t pay less for your energy, you may be able to use less by improving the energy efficiency of your home. It doesn’t have to be expensive; for example, you can buy foil-backed panels to put behind your central heating radiator, so you heat the room and not the wall. If you don’t have 270 mm of loft insulation (approximately 10 inches) you could be losing heat, so it’s worth adding more insulation. More expensive options include fitting thermostatic valves to radiators so you can switch off radiators in rooms you’re not using.

Government help with energy bills

In the winter of 2023-24 the government provided cost of living help for people on means-tested benefits, pensioners and disabled people on certain benefits. However, there has been no specific help for energy bills or the cost of living for others.


Warm Home Discount

The Warm Home Discount is a separate scheme which provides a discount of £150 on your electricity bill for people who qualify. You don’t receive the money as a cash payment, but rather as money off your bill. The scheme operates in England and Wales. Scotland has a separate scheme for people on a low income.

You can qualify for the Warm Home Discount if you’re on the guarantee element of Pension Credit (which means you must be over State Pension age and not receive the full State Pension). You can also get the Warm Home Discount if you’re of working age, on a lower income and getting certain benefits. Most energy suppliers are signed up to the scheme, but some companies only offer it to customers who are over State Pension age.

If you get the Warm Home Discount, be aware that some energy companies restrict it to certain customers over State Pension age, so you may want to check this if you are thinking of switching your energy provider. you can check which suppliers are part of the Warm Home Discount scheme at GOV.UK

Sarah’s tip: Latest figures show that up to one in three people who are entitled to a state benefit called Pension Credit, are not receiving it. If you’re entitled to it, not only could it mean a higher weekly income, but you may qualify for additional help, such as towards your rent and Council Tax as well as the cost of living payment and the Warm Home Discount. Pension Credit can be worth £3,300 a year.


Grants and financial help

You may be able to get other financial help with your bills, such as a grant, for example, but it is likely to depend on a range of factors, such as where you live, whether or not you have savings and/or your income level. The charity Turn2us has a grant search tool on its website. Turn2us also has a free to use benefits calculator on its website, which will tell you if you’re entitled to claim state benefits.

If you’re struggling to pay your energy bills, contact your energy provider as they should reach an agreement with you about repaying any arrears. Most energy companies have their own fund which may be able to help if you’re a customer and are in debt with your energy bills.

If you need help with other debts, contact the company you owe money to or a debt advice charity. A debt advice charity will give you free advice about your debts. You can find out how to get free debt help on the MoneyHelper website.


¹ Rising numbers seek help for energy bill debts, warns Citizens Advice

² Changes to energy price cap between 1 April to 30 June 2024 | Ofgem

More on cutting down your bills

It’s a good idea to regularly review your household bills to make sure you’re not paying over the odds. For more information about getting a good deal on your bills, including energy, water, broadband and your mobile phone, read our handy guide.

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