Energy bills have reached new highs across England, Scotland, and Wales following an increase in the price cap. With many households feeling the pinch, opportunities to save money on annual costs are in the spotlight. Switching suppliers could unlock substantial savings, and some customers might qualify for additional support. Here’s what you need to know about making your energy budget work harder.
Understanding the price cap increase
Rising energy bills are shaping the financial landscape for millions of families, with many left questioning the long-term impact. By unpacking the details of the recent price cap rise, households can take proactive steps to mitigate the strain.
What the rise means for households
The average annual energy bills is now £1,738, reflecting a 1.2% price cap hike introduced in January 2025. This adjustment impacts millions of households already navigating the challenges of increased living costs.
- Affected regions: England, Scotland, and Wales.
- Average increase: £20 more per year for typical users.
Who sets the price cap?
The energy price cap is set by Ofgem, designed to limit the maximum amount energy providers can charge on standard variable tariffs.
- Protects against excessive pricing.
- Adjusted periodically based on market conditions.
Switching suppliers for savings
Switching energy providers can be a straightforward way to reduce annual costs, especially with new deals emerging as the price cap rises. Many households are unaware of the potential savings available, making it essential to explore options tailored to individual usage and financial circumstances.
How to save £148 on your bill
Elise Melville, an energy expert at Uswitch.com, highlights a standout deal: Outfox the Market’s “Big January Sale – Fix’d Dual v1.0.” Switching to this 12-month fixed deal could save households up to £148 annually compared to the new capped rates.
- Eligibility : Customers with debts under 28 days old.
- Steps to switch : Compare tariffs, clear recent debts, and apply for the fixed deal.
Debt considerations for switching
Switching may still be an option for customers in debt, as long as balances are manageable. Those unable to switch can explore deals with their current provider to lock in lower rates.
- Debts over 28 days must typically be cleared first.
- Current suppliers may offer competitive fixed-rate options.
Expert advice for navigating energy tariffs
Navigating the complex world of energy tariffs can feel overwhelming, but understanding the key elements of your bill and available deals can help you make smarter choices. With the right strategy, you could significantly lower your annual energy costs without compromising on your household’s needs.
Key tips for finding the best deal
Emily Seymour from Which? emphasises the importance of comparing fixed-rate deals against price-capped variable tariffs. Her guidelines for identifying beneficial deals include:
- Look for tariffs below the current price cap.
- Opt for contracts lasting no longer than 12 months.
- Avoid plans with significant exit fees.
Addressing vulnerable households
Charities and consumer advocacy groups stress the importance of targeted support for vulnerable groups. Age UK’s Caroline Abrahams voices concern for older individuals facing high costs without adequate government aid.
- Winter fuel payments often fall short of covering rising expenses.
- Calls for better financial assistance are growing louder.
The need for government intervention
With energy costs surging, many families are finding it increasingly difficult to make ends meet. Advocacy groups stress that without swift action, vulnerable households could face a harsh and uncertain winter.
Citizens Advice warns of risks
Alex Belsham-Harris, from citizens Advice, highlights the looming risks for households struggling to afford heating, particularly those with children or low incomes. Advocacy efforts push for immediate government action to introduce targeted support for the most affected groups.
- Millions at risk of energy poverty.
- Urgent need for long-term solutions.
Households have options to counteract rising energy bill costs, but making informed choices is crucial. Whether through switching suppliers or securing fixed-rate deals, small changes can make a big difference in managing energy bill expenses.
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