Updated on 10th May, 2023 by Martin Astley
Businesses, homeowners and tenants across the country have been hit by the recent increase in energy prices.
It has been reported that household energy bills have gone up by as much as 50% as a result of an increase in the energy price cap.
These increasingly expensive gas and electricity bills are leaving many homeowners and tenants out of pocket, with hosts of people wondering how they will be able to heat their homes.
So, what are the reasons for the recent spike in energy prices, and what can people do to keep their bills as low as possible? Find out everything you need to know below.
Energy bills have increased as a result of a rise in the country’s energy price cap in April 2022. Energy price caps were introduced by the market regulator Ofgem in 2019. They were put into place to restrict the amount that energy suppliers can charge per kWh of gas and electricity.
On 1 April 2022, energy price caps increased 54% – an average increase of £693 for properties on standard default tariffs and a rise of £708 for those using prepayment meters.
The rise in energy prices comes as a result of wholesale energy costs nearly quadrupling in recent periods. Energy suppliers simply cannot afford to supply energy at a lower cost than what they pay for it. Consequently, energy bills must rise in line with market prices.
How has the war between Russia and UK affected energy prices?
Russia is recognised as the second largest exporter of crude oil. They are also known from being the largest exporter of natural gas in the world.
It is estimated that in the UK, 6% of crude oil and 5% of gas is sourced from Russia. Meanwhile, Europe gets almost half of its gas supply from the country. This gas is used to heat homes, fuel cars and power planes.
To support Ukraine and condemn the actions of Russia, many countries are planning to reduce their reliance on the country in terms of fuel supply.
Prime Minister Boris Johnson has stated that the UK and its allies must:
“Collectively cease the dependence on Russian oil and gas that for too long has given Putin his grip on western politics.”
There have also been rumours that Russian President Vladimir Putin might weoponise Russia’s resources and restrict the supply of gas to Europe and the UK as a retaliation for sanctions.
These actions will affect energy prices in the UK as the country will have to replace the energy they receive from Russia with supplies from other countries, notably at a higher price. Additionally, the higher demand for fuel is likely to drive prices up even further.
Will energy prices go up again?
In May 2022, it was confirmed that the energy price cap will increase again in October 2022 to £2.800. This could cause a further increase of £800 a year for the average household.
Jonathon Brearley, the Chief Executive Officer of Ofgem, has stated that the energy price hikes are a “once in a generation event not seen since the oil crisis in the 1970s.”
Brearley also added:
“Gas markets remain in a febrile state since the Russian invasion. Prices fluctuated from nearly 16 times the average price last winter at its highest to around four times what we’d usually see. The market remains highly volatile and as a result we do expect further price increases later this year.”
How has the cost of living been impacted by the fuel crisis?
The current fuel crisis and increase in energy prices is contributing to what the Resolution Foundation Think Tank has called a “cost of living catastrophe.” With energy costs rising, people will find it harder to heat their homes and run their households as normal.
According to Keith Anderson, who is the Chief Executive of the energy provider Scottish Power, around 40% of properties in the UK could face fuel poverty in the upcoming winter. Fuel poverty is a term used to describe any household that spends 10% or more of its disposable income on energy.
The cost of living in the UK is set to increase with prices expecting to rise by 7% per year. This is the highest rate it has increased by in 30 years – a circumstance partly caused by the rising fuel prices. Additionally, the April national insurance increase has also meant that people will have to pay more on their monthly taxes.
Altogether, with the rising price of energy and the increasing cost of living, it is clear that many people throughout the UK are set to face financial hardship in the upcoming times.
How to keep your energy bills as low as possible
Increased energy rates and inflation are unfortunately factors which are out of our control. We’ll simply have to make changes in order to adapt. However, there are measures that you can take to reduce your property’s energy consumption and keep your fuel bills as low as possible.
At 247 Home Rescue, we aim to help you boost your household energy efficiency – not only to help you save but also for the benefit of the environment. Below, we highlight 10 of our top tips to help you minimise the energy usage in your home and reduce your gas and electricity bills.
Turn off standby mode
A simple yet effective measure. You could save approximately £55 per year on energy costs by switching your appliances off standby mode. Unbeknownst to some, appliances still use energy when they are in standby, this is known as phantom power. By remembering to turn your electrics completely off at the switch, you can reduce your household energy consumption and lower your bills.
Invest in a new boiler
In most homes in the UK, over 50% of the household energy costs are spent on supplying heating and hot water to the property. Thus, it is vital that you have an energy-efficient boiler system installed. According to the Energy saving Trust, you could save up to £300 on your annual energy bill by getting a new boiler installed. This is because boilers tend to lose efficiency over time, so if your existing system is over 10 years old, it may be time to invest in a new one. This way you can save on your fuel bills and also get a better quality of heating and hot water delivered to your home.
Turn down your thermostat
Another simple yet impactful measure, turning down your thermostat by just one degree could help you save around 10% on your energy bills . According to Energy Saving Trust statistics, if people throughout Great Britain turned their thermostat down by 1°, we could minimise energy bills by as much as £670 million, whilst also saving 3.5 million tonnes of carbon dioxide (CO2) per year.
The ideal room temperature in the UK is between 18°-21°C, so setting your room thermostat to the lowest comfortable temperature can help you save.
**Bonus tip – Wearing extra layers of clothing in the house and closing your curtains can help to keep you warm and place less pressure on your central heating system. This can then help you save on your fuel bills.
Invest in Insulation
Insulating areas such as your walls, floor, roof and loft can help to increase your property’s heat retention and lower your bills. Insulation provides a barrier in-between your home interior and the temperatures outside, this helps to keep your home warm in the winter and cool in the summer. This measure may not be the cheapest, but it is amongst the most effective. The Energy Saving Trust estimates that insulation could enable you to save up to £650 per year.
Insulation can also help to boost the levels of comfort in your property, making it easier and less expensive for you to maintain your ideal room temperatures.
* Bonus tip – Double and triple glazed windows are another effective measure that can help to boost your property’s heat retention and lower your energy bills.
Another effective method for keeping heat within your home to lower your bills is draught-proofing. This is an easy and cost-effective measure which can be performed DIY. Simple tasks such as sealing the gaps in your windows, doors, floors and walls, as well as implementing draught excluders around your property, can help you save around £45 per year.
Choose energy-efficient appliances
You should aim to ensure that the appliances you use around your home are energy-efficient. In the UK, electronic appliances are given energy labels to inform buyers of their efficiency ratings. These labels are rated from A (very efficient) to G (inefficient). Making the effort to choose products that have high efficiency ratings can help to reduce your energy usage and lower your fuel bills.
Use energy more efficiently
As well as buying energy efficient appliances for your property, you should also aim to use your appliances in an energy-efficient manner. For example, you could make more use of natural lighting instead of turning on the light switches within your home. You should also aim to ensure that your lights are turned off when they are not in use – this could save you up to £20 per year on your fuel bills.
Switch to LEDs
Light-emitting diodes are a low-energy, long-lasting alternative to standard incandescent lights. These highly efficient lightbulbs are believed to be 90% more efficient than traditional lightbulbs. They are known to last for up to 10 years, which estimates to up to 50,000 hours of lighting provided. According to the Energy Saving Trust, you could save around £40 per year on energy costs by replacing all of your bulbs with LEDs.
Use water more efficiently
Over half of the average household’s fuel bill goes towards heating hot water. Due to this, great savings can be made by using water more efficiently in your home. For example, you could save up to £70 a year on your energy bills by limiting your showers to four minutes . You could also save by only running your dishwasher and washing machines when they are fully loaded.
Get smart devices
Last but not least, you could increase your property’s energy efficiency by investing in smart devices such as a smart thermostat and smart meter. A smart meter is designed to provide you with enhanced control over your heating, allowing you to make changes whilst on the go via an interactive app, and also enabling you to set up personalised heating schedules. This can help you ensure that your heating is only on when it needs to be, reducing your energy wastage and lowering your bills.
A smart meter is another innovative device that can help you take control over your energy consumption. This gadget is designed to allow you to monitor how energy is being used in your home and they’ll show you your energy consumption in real time with pounds and pence. This can help you identify areas that need to be improved in terms of energy efficiency, leading to great savings on your fuel bills. Smart meters also enable accurate billing so that you’re never charged more than you should be.
As highlighted in the top tips, getting a new gas boiler is one of the most effective ways to reduce your energy bills, especially if your current system is old and inefficient. If you’re interested in getting a new boiler installed, you’ve come to the right place.
At 247 Home Rescue, we specialise in providing properties of all sizes with first-class boiler installations. We install high quality boilers from the industry’s leading brands, including Worcester Bosch, Ideal and Vaillant. Our experts are well-equipped with the skills and knowledge to help you find the most suitable and efficient boiler for your needs.
Kickstart your new boiler installation by getting a free quote today.