It goes without saying that many of us have noticed a sharp increase in our energy bills in 2022. As winter draws closer, households are faced with some real challenges as the cost of heating their homes grows increasingly untenable. Since the 1990s, UK households have had a choice of energy suppliers. If they have found their bills too high, the chances are they could get a better deal elsewhere. But now, with so many smaller suppliers going bust, it can feel as though we are powerless to protect our carefully balanced budgets from the current cost of living crisis.

But even in these bleak times, households are far from powerless. Here, we’ll take a look at what is causing the current energy price hike, and what readers can do to mitigate the impact of an 81% increase in energy costs since last year.

Why Are Energy Bills So High?

There are a number of factors behind the recent spike in energy prices. Russia’s invasion of Ukraine has placed significant strain on gas supplies, raising the wholesale price of gas (the price suppliers pay) around the world. This has greatly exacerbated supply problems caused by the COVID-19 pandemic. This means that it costs more for energy companies to burn gas to generate electricity, as well as costing more to sell gas to the public.

The effects on the UK energy industry have been even more egregious than elsewhere in the world. After privatising the energy sector in 1990, the conservative government since sold much of the country’s energy infrastructure to other nations and private interests, making it harder to nationalise the costs and insulate consumers from price hikes in the same way that other governments such as France, Germany, Greece and the Netherlands have. 

The energy watchdog Ofgem has an energy price cap, which limits how much suppliers can charge households for their average use. In the winter of 2020/2021, the cap stood at £1,042 per year. As the cost of wholesale gas skyrocketed, many smaller suppliers found themselves unable to recover their losses and went bust, with their customers migrating to larger suppliers.

In response, Ofgem decided to raise the energy price cap more substantially and more frequently than ever before. For the upcoming winter, the price cap stands at an eye-watering £2,800 per year or 34p per kw/h of electricity and 10p per kw/h for gas.

I Have A Renewable Energy Tariff. Why Do Rising Gas Prices Still Affect Me?

Many UK households have 100% renewable tariffs, meaning that the energy they use is powered by renewables like solar, wind and hydropower. So, why do rising gas prices affect them, especially those on electricity-only tariffs? It’s a point of frustration among consumers and renewable energy suppliers alike. 

Whatever technological breakthroughs have been made in renewable energy, the energy market itself remains fairly out of date. The price of wholesale renewable energy is actually tied to the price of gas. When gas prices go up, so do renewable energy prices. 

What Government Support is Available During The Cost Of Living Crisis?

If you are struggling with the cost of energy, there is government support available to help ameliorate some of the costs. While an increase in energy spending is unavoidable for most, there are measures that can prevent this from putting a serious dent in your household’s budget.

Some are available to all, while others are means-tested. Let’s take a look.

Energy Bill Support Scheme

The energy bill support scheme is available to all households in the UK and Northern Ireland. It is a £400 discount on energy bills spread out over six months from October 2022 to March 2023. This payment is made automatically via your energy supplier.  

Cost Of Living Payment

In addition to the energy bill support scheme, households on means-tested benefits, such as universal credit, tax credits or pension credits receive a further payment of £650 this year.

Households should already have received the first payment of £326 in summer 2022, with the second payment of £324 made between the 8th and 30th of November.

Pensioners receive an additional £300 cost of living payment, while those on disability benefits also received a one-off payment of £150 in September.

Winter Fuel Payment

While the above are unique to the current energy price hike, there is also support that has been available in previous years, such as the winter fuel payment. This is available to all UK pensioners and varies from £100-£300 depending on your age and circumstances.

Warm Home Discount

The warm home discount is a £150 discount on energy bills for low-income homes. This is paid to your energy supplier rather than debited into your bank account. Applications open in November of 2022.  

Cold Weather Payment

The cold weather payment is payable to households in receipt of certain income-related benefits when temperatures reach extreme lows. 

If temperatures work below zero degrees celsius for 7 days or more, qualifying households are entitled to additional payments of £25 per week. 

What Else Can I Do To Deal With The Energy Price Hike?

Aside from seeking out government support, there are a number of other ways in which you can insulate your household (literally, in some cases) against rising energy costs. Given a sharp rise in inflation, ongoing global conflict and economic disruption, the unfortunate truth is that we can expect to live with inflated energy costs for the foreseeable future. Nonetheless, there are a number of ways in which households can assert more control over their energy costs and keep their bills down as much as possible.

Prevent Inaccurate Estimates

Unless energy suppliers have a clear idea of your usage, they will use estimates to calculate your bills. These will usually be based on historical energy usage data from previous years. If you have moved in recently, you may not have accurately represented your usage. This may result in unreasonably high energy bills. 

Be sure to take meter readings on the same date every month to ensure that you are billed accurately. Ideally, these should be taken 2-3 days before your bill is generated. Better yet, ask your supplier to install a smart meter. These are free to install and will automatically transmit your usage data to your supplier to ensure that you are always billed accurately.

Log Into Your Online Portal Regularly

It’s a good idea to check into your energy supplier’s online portal regularly to get an idea of your usage and how much you will be charged throughout the month. This prevents unpleasant surprises and allows you to budget accordingly. If you pay by direct debit and your payments have consistently exceeded your usage, you may have accrued a substantial amount of credit on your account. If you are experiencing issues with cash flow, this can be debited back into your bank account. You may also be able to reduce your direct debit to something more manageable as long as it covers your usage.

Warm Up The Household, Not The House

Many households will struggle with the cost of heating their homes this winter. As such, if you find that your heating bills are spiralling out of control, consider heating the household rather than the house itself. Wrapping up warm indoors, using hot water bottles and snuggling under a blanket on the sofa are budget-friendly ways to keep warm when the cold weather sets in.

Bleed Your Radiators Regularly

Trapped air within your radiator units can prevent them from heating properly, resulting in heating inefficiencies in your home. Bleeding your radiators every 6 months ensures that they are working at peak efficiency. Radiator additives can also be used to ensure that your radiators stay warmer for longer without using too much energy. 

Be sure to keep bulky items of furniture away from radiators to ensure that hot air is able to spread through your home unimpeded. 

Consider Investing in Better Insulation

How long has it been since you inspected your insulation? Inefficiencies here can result in more hot air leaking out through your roof. It’s time to grab a torch, head into the attic and have a good look at what’s between your rafters. 

Signs that your insulation needs to be replaced include:

  • Holes, droppings and smells that indicate rodent infestation
  • Insect infestation
  • Leaks, puddles and condensation
  • Patches where your insulation looks thinner and less robust

Check The Thermal Efficiency Of Your Windows And Doors

With high heating costs an unfortunate reality for most of us, many households are looking for ways to keep their homes more energy efficient. One of the most obvious ways this can be done is by replacing double glazed windows and doors. 

Even if you already have double glazing, it’s important to note that not all double glazed windows are created equal. The British Fenestration Rating Council (BFRC) has a grading system from A++ to E to ensure that consumers understand how thermally efficient their products are. There’s a chance your windows and doors are less efficient than they could be. 

What’s more, over time, the seal between glazed panels can deteriorate, leading to a loss of the insulating gas between the panes. If you feel a breeze when you walk past your doors or windows, it may be a sign that this seal has failed. 

At KLG Rutland, we’re hard at work helping households all over Nottinghamshire and the East Midlands to improve the thermal efficiency of their homes by replacing and upgrading their double glazed windows and doors, porches and conservatories. 

Our products are locally-made and backed by a 10-year guarantee. What’s more, because we understand that times are tough, we offer interest-free credit to our customers. So you can enjoy a more energy-efficient home without huge upfront costs.