How to minimise your energy bills in 2022
When it comes to household finances, energy bills are a major factor. The cost of our utilities are incredibly high, with recent hikes caused by shortages in production, conflict and transport limitations adding to the pressure on our wallets. Whether you want to know how to minimise your electric bills, your gas bills or your water bills, we are here to help. It's never a good idea to take out payday loans to cover utility bills, so we've come up with some ways reduce the burden.
How are energy bills worked out?
Although we seem to be paying more and more for our energy bills, utilities companies are now limited in terms of how much profit they can factor into their prices. In fact, they now have to publish a breakdown showing how gas and electricity bills are made up.
For both types of energy, wholesale costs make up the largest percentage of the bill, with these accounting for 34.5% of the average dual fuel bill in 2021, according to the latest Ofgem report. After wholesale costs, it’s network costs that contribute the most to the cost of your bill, followed by smaller contributors, like environmental and social obligation costs, operating costs and VAT. For the average dual fuel bill, only 0.93% is the supplier’s pre-tax margin.
First thing’s first - find a cheaper energy supplier
Although you won't always get you a better deal, switching can be worth considering when suppliers are able to offer competitive prices.
With such high costs involved for suppliers, it’s easy to see why finding a bargain energy provider isn’t easy. In fact, there’s often quite a small difference between the less expensive and the more expensive providers.
Having said that, since the market was opened up to competition fully in the 1990s, the number of suppliers has increased massively. There are now 49 energy suppliers to choose from in the UK, with around two-thirds of the market served by large legacy suppliers and the remaining third served by smaller, newer suppliers who are shaking things up a bit, both from a cost and an environmental point of view. So, if you do want to shop around for the best deal, at least you now have plenty of choice, and switching is much easier than it used to be.
When prices increase, more people look to switch and 2021 was a very active year for switching suppliers. In the first nine months of the year alone, 3.9 million households switched their electricity provider, a million of which moved from a large legacy supplier to a new, smaller supplier.
Still, the average household energy bill in 2021 was still a whopping £1,277 per year, with larger dwellings with more people obviously incurring higher bills than smaller homes with fewer people.
How to switch energy supplier
If you think you could be getting a better deal with a different energy provider, do your homework by using one of the trusted comparison sites, such as Money Saving Expert, Compare the Market, or Uswitch. Although these comparison sites can help you to get a better understanding of the market, you won’t always find a better deal.
In fact, sometimes, when the market is particularly unpredictable, suppliers won’t be offering great deals even to new customers, simply because they are too concerned about wholesale prices and the fact that they could rise at any moment. Choose your time carefully when switching and do so when things are more stable and wholesale prices are either stagnant or coming down, for the best deals.
If you do decide to switch, your new provider will take care of the entire process for you, within 21 days and with no disruption to your energy supply. These rules are all part of the market opening up and welcoming competition - and this is great news for consumers who can now enjoy hassle-free switching whenever they want a better deal.
Becoming more energy efficient
As well as switching energy suppliers, saving on your actual energy consumption should be your main focus when looking to cut your electric bills or gas bills. Here are our top tips on how to cut your electricity and gas usage, and save yourself some serious cash as a result.
Our epic energy-saving tips:
Don’t boil water you don’t need
Us Brits love our tea and coffee and many of us will boil a kettle of water several times a day. Making sure you only boil the water you need for the drinks you are making could save you a lot of electricity. Savings per year - £22, according to the Energy Savings Trust.
Use a microwave for cooking
Heating food in a microwave is much more energy-efficient than using an electric or gas oven or stove.
Defrost food ahead of cooking instead of cooking from frozen, as it reduces the cooking time significantly.
Use the smallest hobs
Instead of blasting out gas or heating up your largest electric hob, cook food on your smaller hob to save energy
Cut your showering time
As most of us shower every day, breaking the habit of a long, lingering shower and reducing the time you spend showering to just four minutes can save you an impressive £45 per year from your energy bills.
Ditch the tumble dryer
Hanging your washing outside rather than blasting them in the tumble dryer will obviously save you cash on energy bills - up to £40 a year!
Bleed your radiators
Making sure your central heating is working as efficiently as possible can have a significant impact on your energy bills. Bleeding radiators can help to make sure you are getting as much bang for your buck as possible.
Wash at 30 degrees
Washing your clothes at a lower heat - like 30 degrees instead of 40 degrees, can save you as much as £20 per year.
Bring down the temperature
Most of us could easily lower the temperature at which our thermostat is set to a degree or so lower. Using jumpers and blankets to help keep cosy in the evenings is the key!
Keep your lights off…
When you’re not using them. Save yourself £14 per year.
Switch off standby
Most of us leave our TVs, computers, speakers and set-top boxes on standby when we’re not using them and this costs us £40 per year in wasted energy consumption.
Exclude drafts and insulate
Insulating your hot water cylinder and investing in draft-proofing for any major gaps under doors and around windows can wipe around £50 from your annual energy bills.
We’re all living with increased costs at the moment, from bills and eating out, to filling up the car with petrol - or buying a car in the first place! Costs just keep rising and our wages rarely do the same. This is why cutting back is so important.
If you’re often finding yourself short of cash at the end of the month, simple changes and new habits can help bring your utility bills back under control. Taking steps now might mean having a little more left over for emergencies.
Moneyboat's service is rated Excellent
We do all we can to bring you interesting, practical and valuable information. However, please understand the following:
- Moneyboat.co.uk are in no way connected or affiliated with the application or affiliate links mentioned in this or any article. We do not receive any commission and are not responsible for any charges that may result from any free trials or paid subscriptions.
- Moneyboat.co.uk does not provide medical advice It is intended for informational purposes only. It is not a substitute for professional medical advice, diagnosis or treatment. Never ignore professional medical advice in seeking treatment because of something you have read on the site. If you think you may have a medical emergency, seek medical advice immediately or dial 999.
- Information and data on this blog are for information purposes only. While we work hard to ensure it is accurate, we cannot accept responsibility for the accuracy, completeness, suitability or validity of any information provided on the blog. We will not be liable for any errors, omissions, losses, injuries or damages arising from its display or use. All information is provided with no warranties and confers no rights.
If you feel that any of the information published on our blog is not accurate, please notify us via email at firstname.lastname@example.org.
Representative Example: Borrow £400 for 4 months, 4 monthly repayments of £149.37. Total repayment £597.48, interest rate p.a. (fixed) 255.5%. Representative APR 939.5%.Compare Moneyboat loans.
Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.
Latest blog posts
Wondering if you’re getting a fair share from the bills you split in your household? Our latest blog investigates how Brits split their bills and how fair we find it.