How To Save Money on Energy Bills
- Adam Shaw - TheMoneyDoctor.TV
- 10 minutes ago
- 5 min read
There are big changes happening to energy bills – with costs about to fall significantly and new fixed price deals which are worth considering and might save significant sums of money.
Q: What is happening to prices?
The biggest change to price-capped rates since last summer, is about to hit the market. That’s because when the price cap will drop by 7% from 1 April. That means that homes using a typical, medium amount of gas and electricity will pay around £1,641 a year, or £137 a month.
You'll save around £117 per year on the Price Cap, but it could be much more if you move to a market leading rate or have a bigger than average energy bill, in which case the savings will be proportionately bigger.
New competitive rates may be emerging now, so keep an eye out for them.
Q: Does everyone benefit from the Price Cap?
The change will affect you if you are on a:
Standard variable tariff.
Tracker tariff.
Q: What is the new rate structure?
The new average rates for variable tariffs, for those paying by direct debit, will be:
Electricity unit rate: 24.67p per kWh (currently an average 27.69p)
Electricity daily standing charge: 57.21p per day (currently an average of 54.75p)
Gas unit rate: 5.74p per kWh (currently an average 5.93p)
Gas daily standing charge: 29.09p per day (currently an average 35.09p).
If you have a prepayment meter, you pay the same standing charge as direct debit customers but slightly cheaper rates per energy unit (KWh)
Q: Why is the price cap falling?
The price of energy has been falling on the wholesale markets, so the energy regulator is insisting these savings to the energy companies get passed on to consumers.
But there is a more structural reason prices are also falling. That’s because the costs of two government schemes will be removed from all energy bills from 1st April.
The Chancellor announced in the Autumn Budget that they would cut the cost of living, including by taking an average of £150 off the costs of energy bills from April.
This will be done by ending funding for the Energy Company Obligation scheme, as well as removing 75% of costs for the Renewables Obligation scheme from people’s energy bills.
As a result, energy regulator Ofgem has now confirmed the energy price cap for April – which limits the amount customers on standard variable tariffs pay for each unit of gas and electricity – will fall by 7%.
Q: On a separate note – how do I get a benefit from these energy schemes that are being removed from our bills?
The ECO4 Scheme (Energy Company Obligation, phase 4) offers free grants for energy-saving measures like insulation, heating upgrades, and renewable energy installations like solar panels and heat pumps – helping you reduce carbon emissions, lower energy bills, and combat fuel poverty.
The scheme mainly targets households with low EPC rating of D, E, F or G. Its primary focus is on providing funding for energy-efficient home improvements to low-income households and those living in poorly insulated homes, under ECO4 eligibility. It is expected to meet Net Zero emissions criteria.
Are You Eligible for ECO4 Scheme?
Homeowners: The ECO4 Scheme is aimed at homeowners. Tenants can apply with landlord’s permission if they qualify. Landlords can encourage their tenants to apply (both parties need to agree).
Income and Benefits: If your household has low income, and you receive qualifying benefits, you are likely to get it (no benefits? we may be able to help through other grants).
Property Type and Condition: Prioritisation is given to households living in fuel poverty or with low Energy Performance Certificate EPC rating D and lower.
Q: So, if I am already on a Fixed Price Tariff, this doesn’t affect me – is that right?
You’d think that would be the case, but it isn’t.
While the Price Cap doesn't directly apply to you if you have signed up to a fixed energy tariff,
You’d still see a cut in your bill from 1st April. That’s because the government is removing the costs of some policies which were added to your bills in the past.
Q: Should I get a fixed energy deal?
Most people are actually on variable tariffs. These are the rates that change with the price cap.
But many people can save money by switching from a price-capped tariff to a fixed-term tariff. This varies and isn’t always true and isn’t true for al people – but now is definitely time to start looking at fixed tariffs.
Q: What are some of the best rates out there?
Compared with the new price-capped rates, the cheapest would still save more than £120 per year.
According to MSE “While past performance is no predictor of the future, as our infographic below shows, at every point over the last year, on average, you'd have been better off getting the cheapest 12 month fix than going on the Price Cap.”
Look out for deals as it might be that new fixed price deals are coming out - but the latest information I have would suggest the following are worth looking at:
Outfox Energy or Fuse Energy both of which have a dual fuel deal which is around 14% below the current price cap.
Be careful though because there are exit fees if you decide to get out of the deal before the fixed period is over.
Octopus Energy has a fixed deal which has no exit fees.
There are also discounted rates and EV rates, especially for those charging electric vehicles, which are both worth looking out for.
Q: If I am on a current fixed rate deal – will I benefit from the lower charges?
If you have a fixed tariff that began before these changes take effect, your per-unit price has historically been locked in for the term of your contract — that’s the whole point of a fixed deal. Retail price cap changes or government levy changes normally don’t automatically change your rate mid-contract.
However, this particular policy is expected to be passed on to both fixed-rate and variable-rate customers from 1 April 2026 onwards. Government guidance and energy suppliers are anticipating that the savings from removing those levies will be passed on to those on existing fixed deals (i.e., your unit rates should be reduced) without you having to switch tariff.
Is the price the only reason to switch energy providers?
According to research carried out by Which? A lower price was the most significant reason for 45% of those who switched energy suppliers and actively chose their new firm.
But it's far from the only reason customers told us they switched. The good reputation of the supplier was most significant for a third of switchers. while at least one in 10 people told us that the following were significant reasons for them switching:
To get better customer service
Having the same supplier for both fuels
Recommendation from family, friends or colleagues
Recommendation by energy experts
Having been a customer of the supplier in the past
For a more sustainable or environmentally friendly supplier or tariff.
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