As the new year rolled around, so did new financial challenges for UK families. Energy costs have once again increased. How and why have they increased? What’s the effect going to be on UK families and, most importantly, what can we do about it?
Residential Energy Services provides free energy efficiency advice and support to struggling UK households. We have a wealth of knowledge at your disposal at any time and our energy advisors can help get you started on your journey towards a warmer, more comfortable home and reduce energy bills through a variety of available funding schemes.
For now, let’s explore the recent energy price increase, how it came about and what to expect from your energy bill in 2024.
What is the UK energy price cap?
The UK energy price cap limits the amount that energy suppliers can charge homes for each unit of gas and electricity provided. Ofgem is the energy regulator that oversees the fluctuating changes in this price cap, which is updated three times per year.
As of the beginning of this year, the UK energy price cap has undergone a 5% average increase which means energy bills this winter are going to cost more than last year. Instability in the global market caused by global events such as the war in Ukraine can have this effect on wholesale energy resulting in higher bills for householders.
So what does this increased wholesale energy cost look like once it is passed on to energy consumers?
How much more am I about to pay for energy?
Here’s how the energy price cap increase affects you:
If you are a dual fuel household (electricity and gas) and you pay your bills via direct debit, you will pay on average £1928 a year for energy.
If you pay for energy upon receiving an individual bill, you will pay an average of £2058 a year for energy.
If you prepay for energy a small government subsidy will apply as of January this year and you will pay an average of £1917 a year for energy.
Price cap increase by unit (for direct debit consumers)
Here’s what the price increase means to you per unit of energy compared to last month’s prices. These unit rates and standing charges may vary by region and are only relevant to direct debit consumers.
Source: Martin Lewis (https://www.moneysavingexpert.com/news/2023/11/energy-bills-to-rise-as-new-price-cap-announced/)
How is this affecting UK families?
This price increase will undoubtedly put budgetary constraints on UK families as funds will need to be allocated to cover this increase, resulting in less spend on other comforts and activities.
Fuel poverty may also increase as a result, whereby families struggle with the choice between heating and other essential amenities.
The financial stress of increased bills, balanced with household energy requirements can have an overall detrimental effect on the health and well-being of families both regionally and nationally.
A few tips to help manage the cost of energy
Here are just a few ways you can help manage the effects of this price cap increase in your home and wider community:
Use smart metres – smart metres and heating controls can optimise your heating schedule and give you greater control over the amount that you spend reducing wasted energy increasing efficiency and guaranteeing that you only spend money on the units of energy you consume.
Shop around for energy providers – it is always recommended to keep an eye on better deals when it comes to energy providers; sometimes the simple switch can cut costs considerably.
Simple behavioural changes around the house – can you switch from hot to cold water when performing certain tasks? Do you have thermostatic radiator valves installed or are all of your radiators switched on at the same time? Are you switching off your lights when they are not in use? Simple adjustments can decrease the level of energy waste in your home a little bit at a time.
Engage with your community – we visit local events and community centres all throughout the year dispensing free energy-saving advice and assistance with reducing the cost of energy bills. Conversations with those in your community going through the same struggles enable a collaborative approach towards solving a problem that affects all of us.
Apply for government funding towards home improvements – currently there are several government schemes in place for eligible households to apply for free or heavily discounted energy measures to reduce the cost of your energy bills. The Great British Insulation Scheme specialises in loft insulation, which is proven to control heat loss and decrease your reliance on heating systems, driving down the cost of living.
Residential Energy Services is already helping families across the Midlands and beyond deal with the increase of energy prices, guiding them on their journey towards better energy efficiency at home.
Contact us to see what we can do to help you manage the cost of living more efficiently in the New Year.
