Regulator Ofgem’s energy price cap is rising to £1,755 a year – but you could save hundreds of pounds a year with a few simple steps
Millions of households are being urged to switch energy deal as they are hit by a winter price rise.
Regulator Ofgem’s price cap will increase by 2% on Wedneday, taking the typical gas and electricity bill to £1,755 a year. The increase comes just as temperatures are falling, meaning customers will be using more energy at the higher rate.
But experts say around 34 million customers still on a standard variable tariff – those impacted by the price cap – could save a packet by switching to a fixed deal instead. Price comparison website MoneySuperMarket says the average customer could save up to £271 by doing so, based on data from July that showed 50% of customers using its website saved that most. The cheapest deals on the market now range between a typical £1,429 to £1,643.
Laura Hinton from MoneySuperMarket Energy, said: “Around 66% of households are on a standard variable rate, which means most will see their bills go up just as the winter months set in and energy use increases.”
Emily Seymour, energy editor at consumer group Which?, said: “As we head into the colder weather, many households will be concerned. There are several deals on the market for lower than the price cap so now is a good time to shop around if you’re looking to fix. As a rule of thumb, we’d recommend looking for deals cheaper than the current price cap, not longer than 12 months and without significant exit fees.”
Debt charity StepChange revealed it had seen a 32% surge in the amount of energy related arrears among its clients over the past two years. Simon Trevethick, its head of communications, said: “Not only will people find they are having to switch on their heating now as the weather turns colder, but bills are also set to go up this month, which is another blow to household finances. Energy arrears are the most common type of debt across household bills that we see at StepChange, and people have had little respite from steep costs over the past three years.”
Ofgem’s price cap will increase by an average of just over £35 a year for a typical dual fuel customer paying by monthly direct debit.
Of the approximately 34 million customers impacted by the price cap, about 20 million are on direct debt, around eight million pay their bill when they get it, and six million have pre-payment meters. There has been big shift towards fixed tariffs, with the number of accounts standing at around 20 million.
Industry experts Cornwall Insight hold out hope for households by forecasting the price cap will fall to £1,725 a year for a typical dual fuel household from January. But the sting the tail is that predicts the cap will then rise by £100 in April next year. Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “A dip in bills this January might come as a relief for households, but we shouldn’t mistake this as the start of a trend toward cheaper energy.
Minister for Energy Consumers Martin McCluskey said: “We are taking urgent action to support vulnerable families this winter, expanding the £150 Warm Home Discount to more than six million families, which helps one in five households with their energy bills. In the coming weeks, we will be announcing details of the biggest home upgrade programme in British history to improve up to five million homes, making them cheaper and cleaner to run.
“Wholesale gas costs remain 75% above their levels before Russia invaded Ukraine. The more renewables on the system, the cheaper the wholesale price of electricity, which is why the only answer for Britain is this government’s mission to get us off the rollercoaster of fossil fuel prices and onto clean, homegrown power we control.”
If you are on a standard variable tariff, and are not keen on moving supplier, contact your provider to see what fixed deals they have for you. However, it is also a good idea to look around to see what other suppliers are offering.
MoneySuperMarket says Home Energy has a Fair Variable Dual tariff, described as a price capped deal, that works out at a typical £1,492.30 a year. If you would rather go for a fixed deal than it cites Outfox Energy’s ‘Outfox the Price Cap – Oct 2025 12M v7.0’ deal, at £1,523.31 for an average customer. If you are more comfortable going for a bigger name supplier than E.on Next’s ‘Next Direct Fixed 12M v5’ works out at an average £1,643.20 a year.
Rival Uswitch also highlights market leading deals from Outfox and Fuse Energy, but also lists EDF Energy’s ‘Simply Fixed Oct26v4’ , where rates are fixed for 13 months and which works out at £1,643 on average over the next year. Like most fixed deals, it also had an exit fee if you left early, in its case £50 per fuel.
Remember that with all fixed deals, this applies to the unit rate of energy you are charged. The overall bill depends on your energy usage.
But how would you like to save money without even switching energy deal at all? The Energy Saving Trust has produced low cost tips that it says could save a household between £200 to £300 a year on energy bills.
:: Draught proof to save £40 a year
Draughts let warm air out and cold air in, meaning your heating system has to use more energy to keep your home warm. If your home is draughty, installing inexpensive draught proofing strips around windows and doors is a quick and easy DIY task that could save you around £40 a year on your energy bills. Just be sure not to block any intentional vents, as these are essential for allowing fresh air into your home.
Top tip: If you have an open chimney, fitting a chimney draught excluder could save you a further £60 a year.
:: Bleed radiators and install reflector panels – save £25 a year
From time to time, air can get trapped in radiators, causing cold patches and meaning your heating is not as effective. Bleeding your radiators releases that air so hot water can flow through them better. Radiator reflector panels cost around £30 per pack from your local DIY store. Installing these behind radiators on external, uninsulated cavity or solid walls helps to reflect heat away from the wall and out into the room and could save you around £25 a year.
Top tip: Keep any furniture away from the radiators. If possible, keep your radiators completely unblocked so they distribute their heat into your rooms more easily.
:: Choose central heating over electric heaters
If you have gas central heating, it’s usually cheaper to use this instead of plug-in electric heaters. To heat just one room, turn the radiator valve up in that room and down in the rooms you’re not using. This helps reduce energy use and keeps you comfortable where you need it most.
Top tip: Keep doors between heated and unheated spaces closed, to help reduce heat escaping from the places you want to stay warm.
:: Keep your hot water tank cosy – save £40 a year
Most modern hot water tanks have plenty of insulation, but an older tank might only have a small amount. You can add extra insulation with a hot water tank insulation jacket – these cost about £20, are widely available from DIY retailers and could save you around £40 a year on your energy bills.
Top tip: Insulating exposed hot water pipes is also an easy DIY job. Inexpensive pipe insulation is available from most DIY stores and fitting it could save you a further £6 a year.
:: Manage the thermostat to save around £90
According to the World Health Organisation, the lowest comfortable temperature for most people is between 18°C and 21°C so if you’re warm enough, try turning your thermostat down by one degree, which could save you around £90 a year.
Top tip: If you’re popping out for a few hours, switch your heating off and set it to come back on for when you get back. It usually costs less to set your heating to come on when you need it and just in the rooms that you are using, rather than keeping it on low while you’re out.
Investment ideas to for bigger long-term savings
:: Install a full set of heating controls – save around £110 a year
A room thermostat helps you set and maintain a comfortable temperature at home, while a programmer allows you to schedule your heating to match your daily routine. Programmable room thermostats are also common, combining both these features into a single device. Thermostatic radiator valves (TRVs) give you control over individual radiators, so you’re only heating the rooms you use. Installing and using a full set of heating controls means you can stay warm exactly when and where you need it. If you don’t currently have any of these controls, you could save around £110 a year.
:: Insulate walls
Installing cavity or solid wall insulation is a bigger investment and costs vary but it will make a big difference to keeping your home warm and cosy and result in a large saving. Most homes built between 1920 and 1990 were built with uninsulated cavity walls. If your home’s cavity walls are uninsulated, adding cavity wall insulation could save up to £240 a year. Most homes built before 1920 have uninsulated solid walls. Solid wall insulation can save around £330 a year. Depending on where you live in the UK, different funding options are available to help improve home energy efficiency. The UK Government’s Great British Insulation Scheme offers free or discounted insulation across England, Scotland and Wales. In Wales, eligible households can access free upgrades through the Warm Homes Nest scheme, while in Scotland, support is available via Home Energy Scotland through grants and interest-free loans.
More tips and advice can be found on Energy Saving Trust’s website – preparing your home for winter