I'm an energy expert: Here's how you can beat the soaring price cap right now
You might be using using less gas and electricity in the current heatwave, but it's still worth keeping an eye on your energy tariff.
With a 13% rise in the energy price cap on the way, making good decisions about your energy deal now is likely to put you in a much better position come winter, especially bearing in mind that the majority of the new price increase is set to affect gas rates.
As Which?'s energy expert, I've put together my four top tips to keep you in the know.
Find out more about the energy price cap and why it's rising.
Energy prices are rising for those on standard variable tariffs
On 27 May, the energy regulator Ofgem announed that the price cap on out-of-contract energy tariffs will increase by around £18 per month for a typical household from 1 July.
- Act now: If you're not sure, check whether you are currently paying for a standard variable tariff. It may be also called 'default', 'out-of-contract', or 'flexible'.
More than half of households in Great Britain are paying price-capped rates. You'll be among them if you haven't signed up to a fixed tariff with a set end date, or if you were on a fixed tariff that has finished.
While the increase is 13% overall, that masks the fact that electricity rates will rise by around 5%, while gas rates will increase by a whopping 24%.
If you use a gas boiler for heating, that means that while you might not see a large impact on your energy bills in the next few months, your autmn and winter charges will be much more expensive.
On top of that, the price cap is expected to rise by another 2% in October, according to predictions by industry experts Cornwall Insight. Household use of both gas and electricity soars in autumn, as days get colder and darker.
That's why it's really worth using these tips to get your bills in shape now and prepare for the higher prices to come.
1. Fix your energy tariff
You don't have to pay the higher price-capped rates. By signing up to a fixed energy tariff, you'll avoid the 1 July increase and any further increases that come in the winter.
The cheapest tariff on the market, when we last checked on 26 May, would save a 'typical' household around £18 per month compared with the July to October price cap. This saving is an estimate for a household using a medium amount of gas and electricity. If your home uses more or less, then your savings will differ.
To be clear: you're unlikely to save money for the next month by switching to a fixed tariff, compared with the current lower price-capped rates. In fact, you might pay slightly more.
But fixing a tariff that costs less than the July price cap is likely to save you money in the longer term as prices are expected to rise again in October.
Because you'll use a lot less energy in the next month or two than you will over winter, taking a small hit now is likely to pay off in the winter months. If you wait until later in the year to fix, it's very possible that fixed deals at that time will be closer to (or even above) the new prices.
When you compare energy tariffs, use your actual annual usage (rather than estimates) to make sure that you get an accurate quote.
- Act now: Use our free, independent energy comparison service to compare gas and electricity prices and find the best provider for you.
If you've currently got a fixed deal
Even if you're locked into a deal already, I recommend that you check when it's due to run out.
If your contract's end date is coming up within the next 49 days, you don't need to pay an exit fee to switch early, so you might find that it makes sense to switch now (accepting a slightly higher rate over summer) in order to lock in today's prices for your winter energy usage.
If you've got more than 49 days left on your contract, you'll probably need to pay an exit fee to switch to a new provider early. However, some tariffs don't have exit fees.
Additionally, some providers allow you to switch to one of their own new tariffs (an 'internal' switch) without paying any extra fees. So if you're fixed onto a deal that expires before the autumn, and your provider is offering competitive new tariffs at the moment, it's worth considering moving over to one of those.
- Act now: See the lastest cheapest tariffs on the market in our guide to how to get the best energy deal
2. Find cheaper ways to stay cool
Hot, humid days might leave you dreaming of home air conditioning. But it's expensive to buy and uses lots of electricity.
Some air conditioners can use the same amount of energy in one hour that a fridge uses in a day.
So, before you splash out, try these:
- Use an electric fan well - put it at the same height or lower than you and point the unit up to blow cooler air up to you.
- Close your windows, blinds and curtains when the air is warmer outside than in. Open them all when the sun has gone down to let hot air out and cool air in.
- Take cool showers (not cold) and let yourself air dry.
- Wear thin, loose and cotton-based clothes at night.
Read more: tips for how to keep cool without air conditioning, or see our expert guide to air conditioners vs electric fans
3. Protect your home against future gas price rises
The 13% price cap increase is split unequally between gas and electricity. Gas prices will increase by around 24% and electricity prices by 5% from July.
That's because the crisis in the Middle East affects global gas prices, and a lot of our electricity comes from renewable sources.
You'll feel the gas price rise most when you next use your central heating. So taking steps to reduce your heating bills now will pay off in the winter, even if it feels out of season.
Loft insulation is the cheapest and easiest way to improve your home's insulation. If you have none, adding the recommended 270mm could save up to £200 per year in a semi-detached house.
Topping-up existing loft insulation or smaller jobs, such as adding a jacket to your hot water tank or DIY-fitting foam insulation around exposed hot water pipes, will also help cut costs.
For more detailed, personalised advice, you can use our free home energy planning service, which uses your EPC and other data about your home to recommend the best options for you.
4. Reduce your electricity bills
Using your electrical appliances most efficiently will help make smaller savings on your electricity bill. The appliances that use the most electricity tend to be those that need to heat up or cool down either air or water. So fridge freezers, tumble dryers, washing machines and dishwashers are all worth paying attention to. Here are a few initial tips:
- Wash clothes at 30°C rather than 40°C.
- Only run your dishwasher when it's full.
- Dry laundry outside when you can.
- Use 'eco' settings on appliances that have them.
When you come to replace an appliance, it can be a false economy to opt for the cheapest model if it turns out to be very energy intensive to run. Our product tests include lifetime running cost data – head to our guide to how much your appliances cost to run to make sure you get an energy efficient model.
If you have a bigger budget, consider installing solar panels. Suitable for many homes (not just those with south-facing roofs), they are a great way to lower your electricity bill in the long term.
Besides using the free electricity they generate, you can get paid for putting any excess you can't use into the grid.
Read more: find out if solar panels are worth it for you.
What to do if you can't pay your energy bill
No support has been announced by the government so far in response to the current price rises. However, the government has said that it is monitoring the situation and considering its options for the winter ahead.
If the government does offer support later in the year, it would be targeted to those who need it the most, rather than the universal energy bill support given after Russia's invasion of Ukraine.
Talk to your energy supplier as soon as possible if you're struggling to pay. It might feel like the last thing you want to do, but energy suppliers are obliged to help. This might include:
- reviewing your payments and debt repayments
- reducing your payments or a payment break
- more time to pay
- access to hardship funds
- getting emergency credit or a discretionary fund if you have a prepayment meter.
Find out more: help if you're struggling to pay your energy bills.
