We need electricity and gas to live. As such, we’re slightly beholden to the energy overlords – whatever energy prices they set, we kind of have to roll with it. But we’ve got a few tactics for you to help stay ahead.
Why do energy prices rise?
Several factors impact the price we ultimately pay for our energy supply. Usually, we see rates increase as a response to the wholesale cost of energy going up. Wholesale energy prices are mostly influenced by global politics and the economy so, unfortunately, there’s not a whole lot us as individuals can do about this.
The Big Six dominate the industry, delivering electricity and gas to over two thirds of the population. So, they tend to kickstart the trends. If you’re not a fan of how the mainstream suppliers approach energy prices, you should look at some of the smaller providers. They often not only offer the best energy deals but also come up trumps for customer service, too.
Will the price cap protect me from energy price rises?
The energy price cap was brought in in early 2019. In theory, it was meant to protect consumers against massive price hikes, by implementing a cap on how much suppliers can charge for energy. To stress: this was an absolute limit, not a target. The problem was though, that the price cap encouraged some suppliers to charge up to that maximum, instead of keeping energy prices floating around where they’d originally been.
The price cap is reviewed regularly by Ofgem.
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Will making my home more efficient help beat energy price hikes?
We’ve established that us mere mortals have little control over global energy prices. Yet we do have some agency, and there are small but significant adaptations you can make in your home that will have a big impact on your energy bill.
Ask yourself: how long have you had your boiler? If it’s more than 10-15 years, then you might want to invest in a replacement. Old boilers are much less efficient and consume more energy (plus, they can be at a greater risk to gas leaks).
Take a look at insulation, too. Having a properly insulated home can do wonders to cut your energy bill down by improving heat retention. Make sure your loft looks like a bed of candyfloss, and get double glazing if you can. Even cheap fixes like buying a draught blocker from your local homeware shop will help.
We’re in the smart age, so take advantage of technology. Install a smart meter to not only get a bespoke gas and electricity plan, but save money while you’re at it! For example, smart meters can be programmed to only turn on heating or appliances when you’re on your way home, rather than a time pre-set by a traditional thermostat. So, you can go to after-work drinks and not have to worry about wasted energy.
Will my energy prices rise?
Working out if and when your energy prices are likely to rise depends on your tariff, but with a little know-how you can keep ahead of the hikes. Let’s suppose you’re on a variable-rate tariff: you could see increases if wholesale energy prices rise. Yet the fun thing about variable-rate tariffs is that you can switch suppliers at any time, so keep one eye on the news and your fingers poised to compare energy deals offered by other suppliers. Be prepared and have a cheap deal ready to switch to should prices increase.
Conversely, if you’re on a fixed-rate tariff, you’re safe until the end of your contract. But your rate will increase to your supplier’s standard variable rate as soon as your contract’s up, which will always cost you more than other energy deals on the market. Towards the end of your contract term, you want to start running your energy comparison – don’t be loyal, switching saves you money.
How to beat energy price hikes
Keeping a few tricks at the forefront of your mind can help you stay ahead of energy price increases – go on, play them at their own game!
If you see a great tariff advertised, lock it in. Choosing a fixed-rate tariff and always switching at the end of your contract means you’ll always get the best energy deal on the market. Furthermore, take the time to make your home more energy efficient – you’ll decrease your emissions and also save money.
Finally, you could also opt for an green energy supplier that has a fuel mix of 100% renewable sources. The more people that select these tariffs and providers, the greater the demand for investing in renewables. Eventually, the market could shift so that we don’t depend on resources from other nations, meaning our domestic or business energy supply is not so impacted by global politics.