Something a bit different on the blog today, but still very relevant to family life. This guest post takes a look at energy costs in the home, and has lots of tips and ideas for how to stay in control of your energy bills.
According to Ofgem, the amount you spend on energy could account for as much as 8% of your outgoings, and that’s a lot of your money to part with if you don’t fully understand what you’re spending it on.
Understanding your home energy use is often not a high priority (and not particularly interesting either), but when there’s hundreds of pounds at stake, it’s worth taking a minute to find out a bit more, don’t you think?
How are energy bills worked out?
Your home energy, both gas and electricity, is sold to you in kilowatt hours (kWh). You’ll be charged for every kWh you use, plus you’ll be billed what’s known as a standing charge every day. This is what your supplier charges you to be connected to their supply.
You can work out which are the energy guzzlers in your home by looking at the power rating, usually given in watts on a label fixed to the device. However, the amount they’ll cost to run depends on the length of time you have them on for, so take that into account too.
For example, your hairdryer may be rated 1500 watts, but as you probably only use it for 10 minutes at a time, it’s not going to be a massive consumer. Compare that to a tumble dryer which is also rated 1500 watts but is on for an hour or two at a time, and you can see where the majority of the cost is adding up.
Understanding which appliances use up the most energy can help you get to grips with where your money is going, and is a good place to start to understand why you’re spending what you are.
What does your energy bill tell you?
Not many of us take the time to look over our home energy bill in much detail. We generally check we can afford the final figure, and that’s that. But actually your bill has a lot of crucial information on it which you should take the time to check. Take a look for these things on your last bill:
Charges: Do they look right to you? Suppliers can sometimes get them wrong. Also, is the amount you’ve used actual (A) or estimated (E)? An estimated reading could leave you paying too much or too little, so it’s worth phoning in with a meter reading.
Balance: Are you in credit? If the credit gets too high, you should ask for it back. If you’re in debit, it’s a good idea to put your monthly direct debits up so you don’t end up with a big bill to pay.
Tariff: Your bill should tell you what you’re paying per kWh, and what your standing charge is. You should also check the end date of your tariff, so you know when to renegotiate or switch.
This last point is especially important, as there can be hundreds of pounds a year difference between different tariffs. Look for the Tariff Comparison Rate (TCR) which takes into account both the standing charge and the kWh rate, to allow you to compare between providers and offers easily.
What about the energy price cap?
Although the energy price cap, introduced in January this year, was intended to protect us from overpaying for our energy, in some ways it’s had the opposite effect. As suppliers are no longer able to make up for super cheap tariffs by charging more for those on their expensive default tariff, many of the cheapest deals have disappeared from the market.
Ofgem recently increased the price cap by almost £120, meaning suppliers can charge more for their most expensive tariffs. Since the announcement, five of the so-called ‘big six’ suppliers have increased their prices, with only SSE not announcing a price rise yet.
Research has shown that, by December last year, only eight tariffs existed which would cost the average user under £1,000 a year. That’s compared to a huge choice of 77 at the start of 2018.
What’s important to remember is that the price cap only affects those on the default tariffs, also known as a standard variable tariff (SVT). This is the tariff you’re stuck onto if your contract comes to an end and you don’t renegotiate a new deal.
Right now, there are around 200 tariffs available which are cheaper than the price cap, and in some cases, you could save as much as £300 by switching to a new deal. It’s possible to compare energy deals and make a switch easily online with energy comparison sites like this one.
Other ways to seize control of your home energy bills
If you’re finding your energy bills are becoming a drain on your cash, switching supplier is only one way to turn the tide. Here are some top tips for simple ways to save, which could slash your bills and put you back in control.
Get to know your heating controls: Learning how to use timers, programmers and thermostats can really make a big difference. More than half the money you spend on your fuel bill will go towards heating your home, and the Energy Saving Trust say that better control of your heating could save as much as £75 a year.
Choose more efficient appliances: You’re not expected to run out and replace appliances that don’t need replacing, but when they do come up for renewal, choose the most efficient one you can afford. All home appliances have an energy rating, so go for an A or better to save in the long run.
Insulate: It’s a simple, low cost home improvement, but insulating can really cut down your bills. Loft insulation to 270mm can save up to £130 a year off the typical bill and insulating your walls can save as much as £145. There are often grants to help with the cost of this; talk to your fuel supplier for more information.
Say no to standby: If you’ve got a houseful of gadgets and gizmos, you could be spending around £30 a year just to leave them on standby. Get into the habit of switching things off at the plug to avoid this unnecessary waste.
There are many other things you can do to save energy, stretching from simple, free things like not overfilling your kettle, to more expensive investments like upgrading your boiler. Don’t assume you’re stuck paying high energy bills; make 2019 the year you take control and drive your energy use down.
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