Updated 17th November 2022
The cost of living crisis is dominating 2022. Many households are feeling significant pressure on their household budgets, with energy costs having a considerable effect.
During 2021 24% of households in Fife could be considered to be in fuel poverty, and with huge increases in energy prices this number is set to climb.
Beating these bigger bills will be tricky as many of the usual mechanisms by which we could reduce our energy bills have vanished, for example switching your energy supplier.
In this blog we’re putting together some of our best advice on what you can do to try limit the impact of these price increases.
What’s happening to energy prices
The UK is experiencing an energy crisis. Wholesale energy costs have increased significantly over the past year, but as a result of the Energy Price Cap, there is a delay in when these costs are passed onto customers.
In April prices increased by around 54% to an £1971 for an average direct debit customer. Prices are set to increase by an additional 80% in October, to around £3549.
These price increases have been driven by global fossil fuel markets and the horrific events in Ukraine have also had an impact.
On 8th September the UK Government announced an energy price guarantee, freezing energy prices at £2500 for the average home till April 2023. After which this will be increased, but you can read more of this down below.
Remember, the price cap is misnamed, it’s actually a cap on unit rates and standing charges so if you use more energy you will pay more. It’s also important to remember that the £2500 figure is a UK average, it’s likely those of us living in Scotland are using around 20% more than the UK average.
Usually, one of the easiest steps to take to reduce energy bills was to switch energy supplier, however there are currently no cheap energy tariffs available below the energy price guarantee level.
Most people will now be on a tariff covered by the energy price guarantee. If you’re on a cheaper tariff, you should stick with this as long as possible.
If you are on a fixed price deal you should be able to switch to price guarantee tariff without issue and without paying exit fees.
Unlike in previous years, there is no longer much of a financial incentive to choose a direct debit, which, historically was the cheapest way to pay. Tariffs vary slightly between Direct debit, Prepayment & paying on receipt of bill however there’s not much difference between them that this should be the deciding factor.
You can find videos on our YouTube channel discussing all the benefits and disadvantages of each payment method.
Some things to watch out for:
If you’re paying through a direct debit, don’t just listen to the suppliers recommended price increase. Ask for your annual consumption and divide this amount by 12 to get your recommended direct debit price. Remember the costs are likely to increase again in October, so you may want to overpay over the summer if you have the ability to do this.
If you’re on a prepayment meter you should either set money aside or top up extra throughout the summer to Off set the high gas costs in winter. We’d strongly encourage you to do this. As you pay for energy when you use it, the higher energy costs in the Winter could mean an average household needs to top up around £300 in the January months to keep the lights and heat on.
If you’re paying on receipt of bill, bear in mind winter bills will be far higher than summer bills, if you can set money aside, or start to build up a credit balance, you should do this now.
It’s absolutely vital you submit a reading regularly to ensure you’re billed correctly and are able to monitor your consumption.
We’d recommend providing readings on a monthly basis over the next few months to keep on top of your bills.
If you need a hand reading your meter, our blog here will discuss how to do this.
The Energy Price Guarantee
The Energy Price Guarantee has replaced the price cap until April 2024. The current price is based on an average home using around £2500 of energy a year. From April 2023, this will increase by around 20% to £3000 a year for an average home.
You can read more about the Energy Price Guarantee and how it works in our dedicated blog here.
In order to support households with the cost-of-living crisis the UK and Scottish Governments have announced interventions to support households.
Council Tax Rebate
In April 2022 every household in Scotland in a Council Tax band A-D property will receive a £150 rebate on their council tax that is designed to support households with the energy price and general cost-of-living increase. Fife Council have announced this will be credited to Council Tax accounts and households should be notified in March.
Council tax has been chosen as it’s the fastest way to target this support at households they believe will need it.
Cost of Living Grants
Several new grants were announced to help households with the increase in energy bills.
Every household will receive a £400 rebate on their electricity from October.
There is also a Low-income benefit award, disability award and a pensioner award. These awards will be replicated in 2023.
Further details of support can be found in our dedicated blog here.
Ensuring you have as much income as possible is absolutely vital when our budgets are being squeezed.
We’d recommend contacting our friends at Citizens Advice & Rights Fife for free and impartial expert advice. If your household has someone of pensionable age, we’d suggest it’s even more important as this is the group that are most likely to be missing extra benefits such as Attendance Allowance or Pension Credit.
Grants and payments
You may be entitled to some of the existing grants below which can help you keep on top of energy costs.
Warm Home Discount
The Warm Home Discount is an annual rebate of £150 towards your energy costs. Most suppliers offer this scheme and you can make an application every Autumn for that Winter. Right now, applications are opening for this year, you can take a look at our dedicated blog or video below to find out more.
Winter Fuel Payment
You may be eligible for a Winter Fuel Payment if you were born on or before 26 September 1955. You could get between £100 and £300 to help pay your heating bills.
You can find more information about this here.
The Winter Fuel Payment will be increased by £300 this year and next to support with the cost of living crisis.
Low Income Winter Heating Assistance Payment
This payment has replaced the old Cold Weather Payment in Scotland. If you’re eligible you will be receive £50, every year in February.
Further details can be found here.
Child Winter Heating Assistance
This is a new benefit introduced by the Scottish Government. It is a payment to help disabled children and young people and their families with increased heating costs over the winter.
It’s paid automatically once a year to those eligible and is around £200.
You can find more information about this here.
Making your home energy efficient
Making your home more energy efficient is important to ensure you retain as much heat as possible, and produce that heat as efficiently as possible, saving you money.
It’s worth checking whether your heating system is due an upgrade, usually it’s recommended a gas boiler is upgraded at least every 15 years. There are also several alternatives to storage heaters that may help you save money too.
Keeping the heat in your home is the best way to reduce your heating costs, ensuring your home is well insulated is the biggest change you can make to do this.
You may be entitled to support to install these measures from the Warmer Home Scotland scheme, you can find out more about this on the Home Energy Scotland website.
Budgeting energy use
Without an ability to reduce the cost of our energy, the easiest way to spend less is to use less. That doesn’t mean turning the lights off and sitting in the dark! There are plenty of practical actions you can take to help save energy around your home, reduce your energy bill and your carbon emissions too.
Using your heating controls and finding ways to prevent heat loss around your home can help you keep warm for less. Try do the following or take a look at our heating controls blog.
- Reducing your thermostat by 1°C
- Turn your boiler temperature down to around 55°C or it’s ‘eco’ setting.
- Using your thermostatic radiator valves correctly – see our YouTube video.
- Keeping curtains and doors closed between rooms
In terms of your appliances and cutting down your electricity use, you could consider:
- Switching appliances and devices off at the plug rather than leaving them on standby
- Using a slow cooker, microwave or pressure cooker rather than an oven
- Using LED lighting and switching lights off when that room isn’t being used – see our Youtube video.
You can also download our Home Energy Guide which is full of advice tips and tricks to help you keep on top of your energy use.
Our Watt does it cost? blog discusses how much energy your appliances use to help you find ways to save energy at home.
These tips are just some of the simple tricks we can help you with. For more advice contact our energy advisors on the details below.
Should I cancel my Direct Debit?
Your Direct Debit spreads your energy costs over the year. Some have suggested paying for what you use monthly may be cheaper. This may be the case in the summer, but as you can see from the graph opposite you will be paying 17% of your gas use and 10% of your electricity use in the month of January alone. If you struggle with your direct debit now, it’s unlikely you’ll be able to afford this monthly bill.
We’d urge anyone considering cancelling their direct debit to get in touch for tailored advice before making that decision.
Debt and disconnection
If you fall behind on your bills you should get in touch with us for more advice.
You can also take a look at our dedicated blog for advice on dealing with debt. There may be grants and schemes to assist you with your arrears.
If you have other debts, for example Rent or Council Tax arrears, catalogues or loans etc you should get in touch with Citizen’s Advice & Right’s Fife who can give you the best advice and support possible.
Failing energy suppliers
Around 31 energy suppliers have ceased trading over the past year. This is due to them being financially unable to operate in the current turbulent market.
If your supplier fails, you’ll be appointed a new supplier, known as the Supplier of Last Resort. They’ll move you to their Standard Variable Tariff and ensure you have a continuous supply.
We’ve dedicated an entire blog to answering questions about what happens if your energy supplier goes bust. Head here to find out more.
We understand how frightening the current situation can be. If you’re worried about the increase or need someone to talk you through the help and support that is available or if you’d like further advice on anything discussed in the blog our energy advisors will be happy to assist. We can provide free and impartial energy advice tailored to your unique situation.
Our energy advisors can be contacted by: