How To Save On Energy Prices
- Adam Shaw - TheMoneyDoctor.TV
- Sep 17
- 4 min read
Updated: Sep 18
Average annual energy bills will rise on 1st October for most households. That's because the energy price cap, which most people pay, is about to rise. So what can you do to keep your energy bills as low as possible? Here are some MoneyDoctor.TV answers...
Q: First of all, what is the energy price cap and why should I be interested in it?
A: The energy price cap is the maximum amount energy suppliers can charge you for each unit of energy if you're on a standard variable tariff.
Ofgem introduced the price cap in 2019 at the request of Theresa May’s government.
She had proposed the policy to provide “an end to rip-off energy prices once and for all”.
The policy was a memorable policy move amid a bit of a comic shambles at a Conservative Party Conference in 2017 at which, amongst other things, the letters in a sign behind her which said the Conservatives are “building a country that works for everyone”, started falling off one by one.
Anyway, one of the key things to come from that speech as a restriction on how much the energy companies could charge us for a unit of energy.
Your total energy bill is NOT capped, so if you use more energy you pay ever increasing amounts, but the cost of a unit of energy is capped.
The rate is adjusted every 3 months, so we have a change in October and another in January.
Q: OK I understand the cap but what happens if I just carry on and don't pay attention to what is about to happen?
A: If you do nothing, your bills are likely to rise by 2%. That's because on 1st October, the Price Cap will rise by 2%, meaning a household with typical usage paying by Direct Debit will pay £1,755 a year.
That's not too bad I suppose since inflation generally is running at 3.8%
However, compared to the start of 2023, this is £625 (26.3%) lower than when the energy crisis was at its peak.
Looking further ahead it becomes less clear as to what might happen but there are predictions that in April - the Cap might rise by between 4-8%
So we could be heading in for some turbulent times in energy prices.
Q: So how do I make sure I get a great energy deal?
A: You can make sure you move to the best deal.
There are 2 decisions to make:
1st: What KIND OF DEAL is best for me
2nd: Which SUPPLIER is offering the best version of that deal?
The Kind of deals available are:
Standard variable tariff – this is what most households are on and the rates you pay are set by Ofgem's Price Cap. So the price you pay could change every 3 months.
Fixed rate tariff – this offers a fixed price for each unit of energy for a certain length of time. It might not be the cheapest but at least you are certain what the cost is and can go back to watching soaps on TV instead of thinking about energy prices every 3 months. In other words, it may or may not be the best deal but it does offer certainty.
Prepayment energy tariff – this means you pay for what you use and can be topped up online, over the phone or at local shops. Your tariff options are usually more limited than if you pay by monthly Direct debit, and most are likely to put you on the Standard Variable Tariff.
Economy 7 tariffs – this will take two readings, one for night time (off peak) usage, which is cheaper, and one for usage in the day (peak), which is more expensive. This helps encourage more night time usage, which is ideal if you have storage heaters.
Q: Having chosen what KIND of deal is best for me - how do I choose the best supplier?
A: There are lots of comparison sites you can go to. They include
However my experience has been that all of them ask you huge amounts of questions before giving you any answers. I tend to use MoneySavingExpert.com It is true they also make you sign you to a free account - but it is generally easier to use. What I also like about the site is that they say: "We will always compare and show you the whole of market, even if it doesn't make us money. But we won't be able to switch you to a provider we don't have a relationship with."
Here are some of the better deals I can find today. But things change all the time - so ensure you check the deals available before you make any decisions.
The current price cap is 26.35p per kWh
Electricity
Home Energy: Unit Charge 19.659p kWh Standing Charge 43.7555p per day
Outfox Energy Price Cap: Unit Charge 21.899p kWh Standing Charge 43.758p per day
Fuse Energy 12 month fixed: Unit Charge 22.31p kWh Standing Charge 38.49p per day
Q: Apart from changing supplier, what other ways can I cut my energy bills?
A: Turning your heating thermostat down by just 1 degree could save you £90 a year, according to MSE and The Energy Saving Trust has plenty more ideas, see below:
Washing machines, dishwashers and tumble dryers account for 14% of a typical energy bill, making them the most energy thirsty. The power they need to heat the water or air inside them means they use more electricity.
The charity National Energy Action has a good website with resources and advice. Visit it's help pages at https://www.nea.org.uk/get-help/key-things-to-do-if-you-are-struggling-with-your-energy-bills/
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