The thud of the brown envelope might be in the past but viewing our energy bills online is no less tortuous. When the winter months arrive, we will all be thinking about preserving energy and lower the cost of our bills. Yet, with the night’s drawing in and the days getting colder, it is tough to save money when we want to stay warm.
When you are looking to cut costs, it is good to start with a baseline figure for how much you should expect to be spending. Having this figure in mind will help you understand if there are cutbacks to be made or not. Here we explore the average costs based on your location.
Average Energy Bills
The average UK household spend on energy is £1264 per year on energy bills or £105.33 a month. According to statistics from the Department for Business, Energy and Industrial Strategy, most of this energy is spent on electricity rather than gas, with £707 on electricity and £557 on gas. The disparity between the two is set to grow, as the government has banned gas boilers from 2025.
Ofgem, the organisation that regulates the UK energy market, increased the cap on energy bills in April 2021. The rise in the cap has resulted in households paying almost £100 a year more than they were the previous year. Compare the Market claim that domestic gas price has risen 221% in the last 20 years, and electricity by 193%.
The area with the highest energy bills is Merseyside and North Wales, with an average combined bill of £1310. If you thought London would be the highest, this region comes in 5th and is £20 a year less than the highest. The Southwest, North Scotland, and Southeast all exceed the average cost of London.
If you are looking for cheaper bills, you need to move to the East Midlands, where the average is £1224.96 – though the £80 a year or so difference might not be worth the moving bills.
Londoners spend most on gas, while Merseyside and North Wales guzzle electricity.
The way to pay
How you pay for your energy bills makes a difference to how much you are charged. If you set up a direct debit, your bills are likely to be lower than those on credit or pre-payment meters. Close to a third of all households look to pay by direct debit, but a significant number of people still face higher bills from the other payment methods.
The COVID effect
The pandemic resulted in households staying home more, as we were all in lockdown. The consequence for businesses has been brutal, with many closing down temporarily and some permanently. With these closures comes job losses. The double impact of higher bills and no income will make the payment for energy even harder. In the second quarter of 2020, there was a significant increase in accounts going into arrears as people failed to pay their bills. Unsurprisingly, data shows a strong correlation between people going into arrears and the increase in unemployment.
Reducing energy bills
There are lots of things you can do to reduce your energy bills. The first is to shop around for your supplier. Being out of contract and on a variable rate is the chief cause of excess energy bills. It is easy to switch, and you no longer have to tell your current supplier.
You can also change your heating controls. Even a 1-degree change on your thermostat will make a significant difference to your household bills. Equally, investing in insulation, double glazing, a more efficient heating system, and more can chip away at your costs. Switching your appliances to more energy-efficient alternatives is also a great way to support efforts to reduce the impacts of climate change.
If you want to make smaller changes, you can switch your bulbs to LED. While the cost of these bulbs is higher, they last longer and take less energy. You can also switch items off at the wall some more. Many items in our home are phantom energy suckers. Your toaster, for instance, uses about the same amount of energy plugged in when not being used as when you are toasting your bread. Your TV sitting on standby also uses almost the same energy.
While none of these efforts to reduce your energy bill will make a massive difference alone, they can all add up together.
Updated on 27 Jan, 2022