Energy and the Cost Crisis

The rising cost of energy bills has been on the news a lot recently, and you’ve likely seen reports about the ongoing cost crisis or cost of living crisis.

News like this can feel overwhelming, and it's normal to feel anxious or upset. Whether it's help coping with current news, support for your mental health and wellbeing, or information on managing your finances - we've got you covered. 

Read on for more information on energy usage, ways you can lower your energy bills, hacks when it comes to saving energy and support available.

But first, what is the energy crisis and what does it mean for your energy bills?

What is the Energy Crisis?

After the pandemic, when countries began to recover, the demand for gas started to increase again but it could not be met due to a shortage in supply. This caused 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 making more people turn their heating up.

This increase in gas prices forced some energy suppliers in the UK out of business. By the end of December last year, a lot of energy companies went bust, including bigger companies like Bulb, which affected 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 and 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. 

The rising cost of energy bills affects the overall cost of living. Read more about the cost crisis.

Ways to Lower Your Energy Bills

Use a Comparison Website

Normally you would be able to find a better deal than the one you are on through a comparison website. But it's likely you won't find as many tariffs when you search just now - this is because energy is expensive for companies and they're therefore unable to offer cheap deals.

If you don’t find a better tariff than the one you’re already on, it’s probably better to wait until deals are available again.

For many people who are not on a fixed deal, the energy price cap set by regulator Ofgem will be the cheapest rate available.

Get a Smart Meter

A smart meter can help you understand what you’re spending on gas or electricity. This could help you work out how to spend less. And the good news is most people can get a smart meter for free.

If you don’t want a smart meter, you can buy an energy monitor instead. This tells you how much energy you’re using.

You might also be able to borrow an energy meter from your local council or library. You can contact your local council to check if this is possible.

Check Your Meter Settings

If your meter isn’t set up properly you could be paying the more expensive daytime rate for the energy you’re using at night.

You can check your meter’s set up properly by using a bit of electricity during the day and looking at your meter display. You should only see your daytime meter reading go up.

If you’re not sure what time your daytime rate starts and ends, check if it’s on your bills, contract or ask your supplier.

If You Have an Immersion Heater

It’s important to check some types of heaters and meters are set up properly. It could save you a lot of money.

If you have an immersion heater it costs you on average 50p each hour to use. But really you only need to run it for a couple of hours a day - or less if you have an electric shower. This should give you enough hot water for the whole day.

And if you pay less money for electricity at night, set the timer on your immersion heater so it only heats water at night.

If You Have a Prepayment Meter

A prepayment meter works like a ‘pay-as-you-go’ tariff for gas or electricity. You need to pay for energy before you can use it. It’s also one of the most expensive ways of buying energy.

If you have a pre-pay meter, you can still switch suppliers but currently, for most people, it will be better to stay where you are as prices are capped.

You can ask your energy supplier to change you to a credit meter, but you will probably have to undergo a credit check and your energy account will need to be debt free.

Unplug 'Vampire Devices'

Vampire devices are electrical appliances that drain power when left on standby or when they aren’t in use.

These can include games consoles, TVs, smart devices (like Alexa or Google Home), laptops and kitchen appliances.

Leaving a device on standby doesn't use as much power as when it's switched on, but the costs can soon start to climb. So switching off or unplugging these can be a great way to save on your bills.

Check and change games consoles settings to energy-saving mode - especially if you own an X-Box where this is not the default setting.

Head to confused.com's website to use their vampire energy calculator and see what you could be saving per year.

Insulating Your Home

People in poorly insulated homes could end up spending £968 more on their annual energy bills, than people in highly insulated homes, according to new research from the Energy and Climate Intelligence Unit.

Home insulation traps heat inside a property, usually by covering areas exposed to the outside, such as roofs, floors and walls. If the temperature drops very quickly after the heating is switched off, it's likely your home isn't properly insulated.

Small changes around the home can add up to big savings for your energy bills. For example, fitting your hot water cylinder with an insulating jacket can save you £35 a year in heating costs and 115kg of carbon dioxide emissions. Energy Saving Trust have a page dedicated to home insulation and suggestions to keep your home warm.

The cost of insulation depends on the type needed, and the size and age of the property. It can be an expensive way to recover energy costs but can pay off in the long term.

There is also support available to low income households for installation:

  • The Home Upgrade Grant, managed by local authorities, offers funding for cavity-wall and loft insulation and draught-proofing
  • The Energy Company Obligation requires suppliers to support low-income households with improvements to their home

Reducing Your Energy Usage

Making small changes can have a big effect, for example:

  • Run your washing machine at 30 degrees and make sure you wash a full load when you can
  • Avoid using appliances such as washing machines, dishwashers, and ovens between the hours of 2pm and 8pm where possible
  • Use LED or energy-efficient light bulbs
  • Make sure your fridge is set between 3 and 5 degrees and defrost your freezer regularly
  • Avoid opening and closing the fridge when you walk into the kitchen – it forces your fridge to work harder
  • Only put the amount of water that you need in your kettle, rather than filling it up full each time
  • Don’t put an extractor fan on the whole time you are cooking – use it at the end for a few minutes to extract the steam and heat
  • Think about what appliances you are using - microwaves, airfryers and slow cookers use up less energy than a traditional oven
  • Shower for one minute less than usual - this could save around £85 a year for a household of four
  • Use a tumble dryer less - try to airdry your clothes instead.

Completely turning off your central heating can cause its own issues. Not heating your home properly can cause damp issues and frozen pipes if the weather's cold, which can result in expensive damage. The Energy Saving Trust recommends ventilating rooms and having the heating on to some degree during winter.

Wearing the right clothes can make a huge difference if you're trying to keep warm in a cooler house. But you can also get extra warmth from items like electric blankets and heatpads. Money Supermarket has created a guide on the best ways to stay warm this winter while keeping your energy usage low.

Support

The UK Government announced it will cap energy bills for all households for two years as an attempt to help those struggling with the cost crisis. The typical household energy bill will be capped at £2,500 annually until 2024. The help will be for everyone in England, Scotland and Wales with equivalent assistance for Northern Ireland.

There are also a number of other ways you can get financial support when it comes to paying your bills. 

Energy Discount

The UK Government has announced that all households in the UK will receive non-repayable discounts on their energy bills this winter. You don’t need to do anything to get the money and you won’t have to pay it back. The £400 discount will be paid in six instalments starting from October 2022. Households will get the discount monthly, even if they pay for energy quarterly or use a payment card.

How you get the discount will depend on how you pay for energy.

If you pay by direct debit your supplier will either:

  • reduce your direct debit amount
  • refund the money to your bank account each month

Contact your supplier if you can’t see the deduction on your bill or statement, or the refund in your bank account.

If you have a smart prepayment meter

The payment will be added directly to your smart meter in the first week of each month.

If you have a traditional prepayment meter

You’ll get a voucher from your supplier by text message, email or post in the first week of each month. Your supplier will confirm how you’ll get the voucher nearer the time. You’ll only be able to use your voucher for your own energy account.

You’ll need to take the voucher to your usual top-up point to use it.

If you pay by standard credit or payment card

Your supplier will add the discount as a credit to your account in the first week of each month. The credit will appear on your account in the same way as if you had made a payment.

Warm Home Discount Scheme

If you get benefits, you might be able to get £150 off your electricity bill or £150 added to your prepayment meter. 

If you or your partner get the Guarantee Credit element of Pension Credit, you should get the Warm Home Discount. You might also be able to get the Warm Home Discount if you get a different benefit and the government decides you have 'high energy costs'. They'll work this out automatically - you don't need to contact them.

If you have high energy costs, you’ll get the Warm Home Discount if you get either Universal Credit, Housing Benefit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Child Tax Credits and Working Tax Credits or Income Support.

Find out more about the Warm Home Discount Scheme and eligibility.

Fuel Vouchers

Households that can't afford to top up their prepayment meter might be able to get a fuel voucher. This is a code given in a letter or in a text message or email. It can be used it to add credit to a gas card or electricity key. 

If you're not sure if you are eligible you can contact your local council to help you get a fuel voucher.

You can use a fuel voucher at a shop signed up to PayPoint or a Post Office or shop signed up to Payzone. You must use your fuel voucher within 30 days after you get it.

Cold Weather Payments

Cold Weather Payments are one-off payments to help you pay for extra heating costs when it’s very cold. If you are eligible you’ll get paid automatically each time the temperature drops below a specific temperature for a set period of time.

You’ll only be eligible for a Cold Weather Payment if you already get Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Universal Credit or support for mortgage interest.

Find out more about Cold Weather Payments on GOV.UK.

Grants to Help Pay Off Your Energy Debts

If you’re in debt to your energy supplier, you might be able to get a grant to help pay it off. A number of energy suppliers offer energy grants to their customers, including British Gas, Scottish Power, E.ON and EDF. You can find the full list on Citizen Advice Scotland's website.

If your supplier isn’t listed it can be a good idea to contact them directly to see what extra support they can give you. If you can’t get a grant from your supplier, you might be able to get a grant from the British Gas Energy Trust. These grants are available to anyone - you don’t have to be a British Gas customer. 

Contacting Your Energy Supplier

If you are struggling to pay for energy or think you may get into difficulty, contact your supplier.

Ofgem has rules in place that mean your supplier must offer payment plans you can afford and that you can ask for ‘emergency credit’ if you use a prepay meter and can’t top up. Suppliers must work with you to agree on a payment plan you can afford under these rules.

You can ask for:

  • a review of your payments and debt repayments
  • payment breaks or reductions 
  • more time to pay
  • access to hardship funds
  • advice on how to use less energy
  • Priority Service registration – a free support service if you are a vulnerable person.

Local Energy Grants

You may be eligible for a Local Energy Grant, find out more at Simple Energy Advice.

There may also be grants and schemes run by your local council, you can contact them to find out more. 

Find More Information & Further Support

For more information about the cost crisis, visit our dedicated page on Coping With the Cost Crisis.