Npower last week announced massive hikes to its energy tariffs – right in the middle of the winter when
consumption is heaviest – and analysts expect its rivals to follow suit in the coming weeks.
The move is expected to add up to £130 to customers’ energy bills, and could once again see annual costs passing the £1,000 mark. And with most households still recovering from the Christmas financial hangover, the extra expense will put cash-strapped consumers under even greater pressure.
The latest hikes are the result of rising wholesale gas prices and hefty new green taxes imposed by the government (making Alistair Darling's recent enquiry into the reasons behind rising energy bills seem a tad foolish).
Thankfully, there are two simple ways to reduce those monthly bills; by ensuring you are on the most competitive tariff available in your region, and by reducing your usage.
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Getting the right tariff
Switching energy providers is probably the most effective weapon customers have against rising costs, as it lets your provider know you won’t put up with their uncompetitive rates. And it’s remarkably easy to do thanks to the Internet, as witnessed by the fact that 2.8 million households switched in the first seven months of last year.
Unfortunately, suppliers now seem to be pricing all their standard tariffs similarly, which reduces the benefits of switching – at least until one supplier breaks with the others and cuts its rates.
But did you know you can actually save even more than switching simply by changing to your current provider’s cheapest deal. This will almost always be their online tariffs, which work out up to £100 cheaper than standard plans.
| Supplier | Standard Plan | Online Plan | Difference |
| British Gas | £912 | £742 | £170 |
| Scottish & Southern Energy | £875 | £777 | £98 |
| E.On | £913 | £769 | £144 |
| Scottish Power | £958 | £770 | £188 |
| EDF Energy | £917 | £819 | £88 |
| npower | £1,056 | £901 | £155 |
| Average | £937 | £796 | £140 |
Use our comparison tables to cut the cost of your gas supply
Dual fuel isn’t always best
Another way to keep your bills low is paying by monthly direct debit, as companies charge more to anyone who doesn't do this. Finally, you may be surprised to learn the opting for the dual fuel option isn't always the cheapest.
Logic states that suppliers would offer the best discounts to customers who were paying them for both gas and electricity, but recent research suggests that choosing the cheapest standalone tariffs could save you money.
The difference between dual fuel and standalone costs can be marginal - some £20 or so - but that shouldn't be a reason not to look into whether you can save money.
Slash your electricity bills with a cheaper tariff
Cutting your usage
Using less energy needn’t mean flogging the heater and reading by candlelight. The truth is most of us are wasting a lot of energy without even realising it.
With gas making up the largest part of energy bills, it’s the best place to start looking for savings. Perhaps the most effective method is to reduce the amount of energy required to keep your house warm during the winter months by ensuring it is properly insulated.
Wall insulation can prove expensive, but loft insulation is both cheap and effective. You might also want to consider insulating your water cylinder – the savings will be minimal (less than £10 a year) but it’s easy to do and all the savings add up. Read more about the costs versus the savings of insulation here.
Shop around for better deals and lower tariffs to save
Use less electricity to avoid month-end shocks
There are also a host of tricks you can employ to cut your electricity bills without infringing on your lifestyle.
For starters, Energy saving light bulbs last up to 12 times longer and use up to 75% less energy, saving you £78 over their lifetime.
Turning down your thermostat by just one degree will cut your annual bills by £30, while you could save a further £37 by switching appliances off rather than leaving them on standby. If you’re in the market for shopping for any new white goods, look out for the Energy Saving Recommended logo, which means the product will cost less to run.
You may also want to consider ditching your boiler if it is more than 15 years old. It may be expensive, but replacing your boiler with a condensing one can save you up to a third on your heating bills.
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Need to look out for yourself
Whether it’s down to wholesale price rises or UK supple shortages, energy prices are headed on an upward spiral that will place ever more pressure on consumers’ wallets.
And with no indication of prices falling any time soon, its essential households do their utmost to manage their own bills.
None of the above solutions is a ‘silver bullet’ that will magically transform your finances, but by combining all or most of them together, you may well notice a significant reduction to your monthly outlays.
Use our comparison tables to cut the cost of your gas supply
Our top ten energy saving tips
-Switch to the cheapest provider in your area
-Pay by direct debit Check cost of standalone tariffs
-Make sure you choose their online tariff
-Invest in loft and water cylinder insulation
-Buy energy saving light bulbs
-Turn your thermostat down by one degree
-Don’t leave appliances on standby
-Replace your boiler with a condensing one
-Look for the Energy Saving Logo on new white goods
