As we head towards 2024, concerns about soaring energy bills are taking center stage. If you find yourself struggling with mounting energy costs and are eager to uncover ways to trim them down, we’ve compiled some valuable money-saving tips for you below.
Understanding the Energy Cost Surge
After a challenging few years, 2023 has delivered a new challenge: surging energy bills. To compound matters, the energy price cap saw a further increase of £96 in April. This uptick has effectively returned the cap to pre-pandemic levels, all while we try to work through the ongoing economic uncertainties deriving from the pandemic.
However, energy regulator Ofgem has now announced that its price cap will drop from £2,074- £1,923 from October 1, meaning that the annual bill of a typical household should drop by around £151 a year. Money experts have revealed the exact date you should take a meter reading as energy prices set to drop, read here. This doesn’t mean that energy costs will go back to normal though – they are still likely to be high and can cause a challenge to those who are already facing financial difficulties.
Despite the general price cap, opportunities for savings remain. Ofgem recommends switching energy suppliers to save money. Many suppliers extend discounts to customers who make the switch, providing a chance to make substantial savings.
A Collective Struggle: The Rising Challenge of Paying Energy Bills
Since February last year, more than half a million new households have fallen behind on their energy bills—over two million homes across the UK. Emerging from a harsh winter, families are faced with the same, if not higher, energy prices, despite diminished household disposable incomes.
Approximately 700,000 homes relying on prepay energy meters found it challenging to afford top-ups for most of last year—leaving many without access to this essential utility.
Assistance for Those Struggling to Pay Energy Bills
If you’re among the many struggling to meet your energy bills, there is assistance available.
The government has collaborated with energy companies to implement measures that support customers. These include bill repayment and debt repayment plans, payment breaks and reductions, and access to hardship funds. The eligibility for these initiatives is assessed on a case-by-case basis. For more information on what you may be entitled to, call us at 0333 987 0000
Can Switching Suppliers Reduce Your Energy Bills and Boost Your Savings?
Switching energy suppliers remains one of the most effective ways to reduce your energy expenses. Many energy companies offer enticing rates to new customers or those switching from other providers.
Smart consumers who regularly switch suppliers keep their bills at a minimum. The process is straightforward, offering an opportunity to save hundreds of pounds annually.
Is There a Penalty for Changing Energy Suppliers?
Energy tariffs in the UK come in two varieties: fixed price and variable. Fixed-price tariffs are typically more cost-effective but involve committing to a fixed period and energy price, usually spanning 12, 18, or 24 months.
Upon the contract’s expiration, you’ll likely transition to a variable tariff, enabling you to switch to another supplier without incurring a penalty. Exit fees are commonly associated with early termination of fixed-rate tariffs. Fortunately, most suppliers now permit switching up to 49 days before your tariff’s end date without a fee.
Finding a Better Energy Deal: Your Options
To secure a more advantageous energy deal, consider your options. You can either individually check with each energy company by visiting their websites, sifting through packages that suit your needs—a time-consuming endeavor.
Alternatively, opt for a comparison website that simplifies the process. You input your current usage and spending, and it presents a list of suppliers offering the best deals for your circumstances.
When’s the Best Time to Switch Energy Suppliers?
The ideal time to switch energy suppliers hinges on your specific circumstances. If you’re under contract with a supplier, you may need to wait until the contract concludes, before making a move.
Thankfully, Ofgem has mandated that termination fees do not apply if you decide to leave your contract within the final 49 days. This provision affords you the time to transition to another energy supplier without the risk of service interruptions.
Switching energy suppliers typically takes about two to three weeks, though some suppliers that have signed the Energy Switch Guarantee pledge to switch customers within 21 days. Participating suppliers include British Gas, EDF Energy, E.ON, npower, Scottish Power, and SSE.
At Debt Movement we provide professional debt guidance and solutions that help you move out of debt. We offer non-judgemental financial guidance to relieve the burden of financial strain and offer support on your journey to financial freedom. Request a free call back today.
