A combination of recurring lockdowns and the new ‘normal’ of working from home has led to a rise in average annual energy costs over the past year, as Brits spend more time at home. With working from home possibly becoming a permanent reality for many workers, and Deloitte’s survey this week suggesting that almost a quarter don’t want to return to the office, it is possible that some consumers could continue to face higher energy bills even after the pandemic is behind us.
New data from price comparison experts, Quotezone.co.uk, reveals that domestic energy consumption has spiked by an average of 17% during the pandemic, with the average annual energy bill rising from £688 in 2019 to £802 in 2020.
The findings, which are based on a sample of over 50,000 energy comparisons during 2019 and 2020, suggests that the recurrence of lockdowns, particularly during winter, has taken its toll on household bills across the country – with 59% of people reporting their energy usage as ‘high’ over the course of the pandemic.
Although the end of the pandemic is in sight, the hike in energy costs is set to continue well beyond the most recent lockdown as the upward pressure on prices is unlikely to stop. The energy regulator, Ofgem, recently announced that from 1 April the price cap will return to pre-pandemic levels, as a result of the increase in wholesale energy prices. Over the next six months, the price cap will increase by £96 to £1,138 for 11 million customers on their supplier’s default tariff, and by £87 to £1,156 for 4 million prepayment meter customers.
And while the price cap still seeks to protect consumers who have not switched energy provider, there are other options that could help consumers save more each month. Ofgem, for example, recognises the importance of searching for fairer and less expensive options – a process which has never been easier.
Here are a few tips on how to keep household bills down:
- Switch provider: according to Ofgem, consumers are able to save around £360 every year, meaning they are able to offset the increase in energy spend. Switching provider doesn’t just help save money, it also allows consumers to find suppliers with better customer service and seek out more environmentally-friendly suppliers.
- Thermostat control: by turning the thermostat down by just one degree the average home can save around £60 a year, according to the Energy Saving Trust. Additionally, for a long-term solution, consumers should look to install heating controls to help prevent wasted energy use. Many of these thermostats can be controlled from phones, so customers can be in control of their energy usage no matter where they are.
- Make the home itself more efficient: depending upon the concern around the current bill, there are many ways to make sure the home is running optimally and efficiently. The best solution is to improve the insulation; however, this can be quite a costly process. A more immediate solution is to use energy efficient lightbulbs – a relatively inexpensive solution which helps to reduce costs over a long period of time.
- Claim tax relief: make sure to take advantage of tax relief which allows anyone working at home on a regular basis to claim relief on gas and electricity bills – as well as metered water and business phone calls. HMRC are offering relief worth £6 a week with virtually no additional hassle as workers will not need to provide receipts or factor in any complicated calculations.
Greg Wilson, Founder of energy comparison website Quotezone.co.uk said, “With working from home becoming an increasingly viable option, it comes as no surprise that energy usage has increased, resulting in less cash in consumer pockets.
“Although we’re hopefully entering the last phase of the pandemic now, which coupled with better weather means people should increasingly begin to venture outdoors, this does not necessarily mean that our energy bills will start to go down. Over 15 million homes will be affected by Ofgem’s recent announcement that price caps will rise from April, showing that the next six months will prove critical for many consumers who want to spend less and start saving.
“There are many ways to tackle increasing energy costs, but the most effective way is switching energy provider – a process which has never been easier. By choosing an Ofgem accredited comparison site such as ours, consumers can get an understanding of what’s on offer across a range of energy suppliers – instantly providing an overview of more competitive prices. Given the increase in energy consumption and the new hike to the energy price cap, there has never been a better time for consumers to start seeking better and fairer options.”