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How to save money on gas and electricity bills

Are you wasting cash on your energy bills? It only takes 20 minutes to check, and it could save you up to £300 a year. You could save even more by being efficient with your gas and electricity usage.

Best ways to save on gas and electricity

The average household can save £300 per year by switching gas and electricity supplier.
Source: Ofgem

Energy bills can be expensive, but there are a few things you can do to keep your costs as low as possible.

  • Switch: Changing energy supplier is easy and can knock hundreds of pounds off your bills. It doesn’t matter if you rent or own your home, as long as you pay for your own gas and/or electricity, you should be able to switch. If your landlord pays for your energy, they have the right to choose the supplier. Some tenancy agreements may have clauses about switching, but if you pay for your energy, you should be able to decide who to get gas or electricity from. If you have a prepayment meter you should be able to switch too, even if your accounts have negative balances of up to £500 for electricity and £500 for gas. If you’re not on a prepayment meter, you’ll need to pay the balance before switching. If the balance is being billed to you even though it’s your suppliers fault as part of Energy backbilling, you don’t need to pay. Find out more on the Ofgem website
  • Pay by direct debit: It’s usually cheaper and means you won’t have to worry about missing payments.
  • Use less: It sounds obvious, but the less energy you use the lower your bills will be. There are plenty of tips and tricks you can use to cut your consumption. We’ve listed some below.
  • Make your home more eco-friendly: Better insulation, a new boiler, solar panels… There are lots of options out there which could help you save up to £250 per year. Read on to see if you’re eligible for a government grant.

Switching gas and electricity suppliers – the basics

Shopping around

It’s now easier to find the best deal by sharing your banking information. Find out more about this here.

Changing energy supplier is easier than ever and can save you hundreds of pounds on your energy bills.

The whole process shouldn’t take more than 21 days and you won’t be cut off at any point. The only change you’ll notice is a new supplier sending you your bills (if you switch supplier) and lower rates.

If you get a Warm Home Discount, make sure the supplier you’re switching to offers the discount. Find out more in our Help with heating costs section.

Before you get started, you’ll need:

  • A recent energy bill, or annual energy statement
    This contains details about your current energy plan, including how much you use and the name of your tariff. If you don’t have a recent energy bill, you can contact your current supplier for this information.
  • Your bank details
    You’ll need these if you decide to switch.

Step 1 – Choose a comparison site

Price comparison websites help you compare the different energy deals available and they’re a great way to see what’s available.

They don’t all work with the same suppliers, so use a few to make sure you don’t miss out on the perfect deal.

We suggest using sites that Ofgem recommends and that have been accredited with the Confidence Code. That’s because these sites will:

  • help you find the best deal for you in your local area
  • provide a free and easy-to-use switching service
  • give detailed information on each tariff, including gas and electricity unit prices
  • detail any discounts available.
You can find a list of Ofgem accredited price comparison sites on the Ofgem website.
If you live in Northern Ireland please use the Consumer Council.

Step 2 – Switch

Some price comparison sites offer rewards such as vouchers and cashback if you switch through them.

Once you’ve picked a few price comparison websites to use:

  • Put your details into the price comparison sites.
  • Look through the results and pick the energy plan that best suits your needs.
  • Don’t forget to look at more specialist tariffs like Economy 7. This charges you much less for electricity you use at night, so if you use storage heaters, dishwashers, slow cookers or washing machines off-peak, you’d save money.
  • Your new supplier will arrange the switch and will ask you to provide meter readings.
  • Your old supplier will send you a final bill.

That’s it – you’re done. The whole process shouldn’t take longer than 21 days.

What if I 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.

That means putting money directly into your meter, using an electric or gas meter key, tokens or, in some cases, topping up online.

The main benefit of prepayment meters is that you won’t spend more than you have, but it’s also one of the most expensive ways of buying energy.

My energy supplier wants to install a prepayment meter

If you’re in debt to your supplier, they might decide to install a prepayment meter in your home.

You can refuse it if it would be difficult for you to go to the shops and top it up, or if the meter would be difficult to access due to a disability, or if you’re elderly.

If you’re having difficulties dealing with your energy supplier, you can sign up to use the Priority Services Register (PSR). This offers you free support to help you work through any problems with your suppler. Find out more about the Priority Services Register on the Ofgem website.

Can I switch energy if I have a prepayment meter?

Yes, many energy suppliers have a prepayment tariff, so you can compare these and pick the cheapest.

All you need to do is choose a price comparison site on the Energy Compare website and tell them you have a prepayment meter. We recommend using more than one comparison site, as they don’t all show the same suppliers.

You’ll then be shown a list of prepay gas and electricity deals you can switch to.

You won’t be getting the cheapest deals available on the market, but you might be able to save £150 per year on bills.

Switching to a standard meter

Prepayment meters are one of the most expensive ways to get energy, so it’s worth asking your supplier if you can switch to a standard meter.

Your supplier might ask you to pay for your meter to be changed, or meet certain conditions, like not being in arrears for a period of time.

You might be able to save hundreds of pounds a year by moving to a standard meter and switching to a better deal, so it’s recommended that you ask.

Using less energy

We’ve picked out five of the Energy Saving Trust’s top tips to help you on your way. They all have a big impact, so even if you just do one of them, you’ll still be better off.

  1. Turn down your thermostat – just reducing it by 1°C could cut 10% off your heating bill – it usually saves around £75 per year.
  2. Turn off the lights – when you leave a room.
  3. Fill up your washing machine, tumble dryer and dishwasher – one full load uses less energy than two half loads. Wash your clothes at 30ºC and don’t use the tumble dryer if you can avoid it.
  4. Don’t boil more water than you need – making a cup of tea? Just boil enough for a cup of tea.
  5. Use energy saving light bulbs –They last up to 10 times longer than ordinary bulbs and don’t cost much more. Using one can save you around £55 over the lifetime of the bulb.

Make your home more energy efficient

Check the recommendations in your property’s Energy Performance Certificate (EPC), if you have one. You can access your Certificate on the EPC Register.

Spending a little to save a lot is a good investment – especially if you don’t have to spend your own money.

There are lots of grants available to help with things like:

  • improving your insulation
  • upgrading your boiler and appliances
  • installing solar panels or other renewable technologies.

Even without a grant, some of these investments will pay back what you’ve spent quite quickly and then start saving you money.

Get a free home energy check and save money on energy

Find out what home improvements you need with a Home Energy Check from the Energy Saving Trust.

It’s free, it’s easy, it takes under 10 minutes and it could save you up to £250 per year.

You’ll get a personalised report about your home, telling you what could save you the most in the long term and energy efficiency advice.

What grants are you eligible for?

To see what energy saving grants you could get, visit the GOV.UK’s Energy Grant Calculator.

Fixed price energy tariff vs variable rate energy tariff

If you’re on a fixed price energy tariff, remember to switch again before your deal ends to avoid being rolled over onto a more expensive deal.

With a fixed price energy tariff:

  • You won’t be affected by any price hikes for the duration of the contract.
  • But, if energy prices fall you might be stuck paying a more expensive rate.
  • Some fixed tariffs have exit fees which you’ll to pay if you want to switch again before it ends.

Getting a fixed tariff doesn’t mean your energy bills will stay the same no matter how much energy you use.

You’ll pay the same rate per unit, but if you use more units, you’ll spend more money.

With a variable rate tariff:

  • Your bills rise and fall based on whatever is happening in the energy market.
  • But, if energy prices drop so will your bill.

Energy price cap explained

From December 2018, there will be an energy price cap. This means that energy suppliers will not be able to charge more than the capped price for energy.

Be aware that:

  • even with the cap, you’ll probably still have to switch to make the biggest savings. Use our switching tips to get the best deal.
  • it’s not a cap on the total price you pay but a cap on the rate that will be charged
  • not all energy tariffs are price capped
  • the cap varies depending on the area you live in with the UK average cap per year being £1,136 for the average user in 2018
  • the price cap will be reviewed during the year so could go up
  • the cap could end by 2020.
Find out more about price caps and how they affect you if you’re on a default tariff, prepayment meter or you’re getting a warm home discount on the Ofgem website.

Help if you’re sent a catch-up bill for energy: Energy backbilling

Sometimes you might be using more energy than the amount your energy supplier thinks you’re using. This is especially a problem if you’re on a Direct Debit, or don’t send your meter reading to your energy supplier regularly.

If you are using more energy, your supplier might send you a catch-up bill. This is a bill for the extra energy you’ve used above the amount you’ve paid for. If you’re switching, you could be sent a catch-up bill, depending on how accurately you’ve been charged for your energy use.

Energy backbilling sets out rules for sending you catch up bills. They can be for any amount, but cannot be for energy used more than 12 months ago.

Find out more about energy backbilling on the Ofgem website.

What happens if my energy supplier goes out of business?

While it’s rare, sometimes energy suppliers do go bust.

If this happens, the Ofgem safety net makes sure you aren’t left without energy.

The safety net moves you automatically to a new energy supplier, onto a new deal. The deal is chosen using a competitive process and may be slightly more than your old tariff. You can end your new deal whenever you want.

Find out more about the safety net on the Ofgem website.

Struggling to pay your energy bills?

If you can’t afford your energy bills, talk to your supplier.

They can help you work out exactly what you owe and might be able to work out a repayment scheme.

If you get benefits, you might able to pay back money owed to your energy supply using the Fuel Direct scheme.

This works by taking a set amount from your benefits to pay your debt, plus an extra amount to cover your energy use, automatically.

This article is provided by the Money Advice Service.

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