The savings figures on this page are based on the April 2022 energy price cap. They will be reviewed and updated by 1 October 2022 to reflect the October energy price cap, as announced by Ofgem this August.
It’s been hard to miss news aboutenergy bills over the past few months, and you’ve likely seen reports about the ongoing energy crisis. But what is the energy crisis and what does it mean for your energy bills?
The energy crisis is an ongoing shortage of energy across the world, which is affecting many countries including the UK.
Why is there an energy crisis?
As countries began to recover from the pandemic, demand for gas started to increase again and could not be met due to a shortage in supply, causing gas prices to increase in 2021. The problem was made worse by renewable sources like wind and solar producing less power and cold weather during the winter months forcing more people to turn their heating up.
This increase in gas prices forced some energy suppliers in Great Britain out of business. By the end of December last year, a total of 28 energy companies had gone bust, including bigger companies like Bulb, affecting over two million customers. If your energy supplier collapses, you don’t need to do anything. You will still receive your gas and electricity as usual. Ofgem, the energy regulator, will move your account to a new supplier. They will let you know which one this is.
More recently, Russia’s invasion of Ukraine has threatened supplies and driven up prices further. Russia is one of the world’s largest producers of oil and gas, supplying the EU with 40% of its gas in 2021.
What does it mean for your energy bills?
Ofgem introduced an ‘energy price cap’ in Great Britain in January 2019 following concerns that many people, particularly those who did not switch supplier to find cheaper deals, were paying too much for their energy. The cap is the maximum amount energy suppliers can charge for their energy.
The cap was reviewed twice a year, but Ofgem recently decided to review the energy price cap every three months, to help stabilise the energy market. According to Ofgem, the change should allow energy companies to adjust bills more quickly in response to the prices they’re charged by wholesale suppliers. This should stop more energy companies going bust.
The next price cap will come into force from 1 October but is expected to be announced by Ofgem in August.
What can I do to reduce my energy bills?
We recommend that you try and reduce how much energy you currently use at home – for example, turning off the lights when you leave the room or reducing the number of times you use your washing machine in one week. Our quick tips all add up and could help you start saving on your energy bills today.
We also advise you to submit an up-to-date meter reading before the new price cap comes into effect from 1 October.
If you don’t, your energy provider will estimate how much energy you’ve been using, meaning that you could be charged at the higher rate for energy used before the price cap came in – even if you’ve cut your energy consumption.
What can government do about the energy crisis?
Ofgem are calling on the UK Government to provide further emergency funding for households that need it the most, helping to protect people from rising energy costs now. Other measures like cutting VAT on energy bills, for example, could help the average household save around £90.
In the longer term, the best way the government can bring down bills is by reducing our reliance on fossil fuels while improving the energy efficiency of our homes. Moving to renewable energy sources like wind and solar power will reduce our dependence on fossil fuels like gas, helping to avoid future energy crises, while improving insulation will reduce the amount of energy we need in the first place.
Is there financial support to help my pay my energy bills?
All households in England, Wales and Scotland will get £400 of their bills from October, with monthly payments over six months from October to March 2023. The UK Government is working to ensure that people in Northern Ireland receive equivalent support as soon as possible.
Additionally, our top tips could also help you save up to £375 off your utility bills in a year…..
- Switch off standby
- Draught proof windows and doors
- Turn off lights
- Careful with your washing machine use
- Purchase a clothes dryer and avoid using the tumble dryer
- Spend less time in the shower – in and out!
- Swap your bath for the shower
- Be savvy in the kitchen with appliances
- Only set your dishwasher off when full
- Insulate your hot water cylinder
Such actions will help reduce the energy usage in your home.
If you want to discuss any of these measures, please do contact our office on 01904 393989 and one of our experienced team, will be happy to help you.
