Energy bills going up is one of those things that feels unavoidable, like you just have to absorb the hit and get on with it.
However, as it turns out a lot of people are paying more than they actually need to, not because they can’t afford a better deal, but because switching feels like a faff, and it keeps getting pushed down the to-do list. The price cap rose again in July, and if you’re still sitting on whatever tariff you landed on last time you thought about it, there’s a reasonable chance you’re overpaying.
The loyalty trap is real, and it costs people a lot.
Energy companies aren’t rewarding you for staying with them. There’s no bonus for being a long-term customer, no discount for never causing any trouble or always paying on time. What actually happens is that your fixed deal ends, you get quietly moved onto a standard variable tariff, and your bills go up while you’re busy doing other things. It happens gradually enough that most people don’t notice until they look back and realise they’ve been overpaying for months.
The gap between what a loyal customer pays and what a new customer on a decent fixed deal pays can be substantial. Estimates suggest households that don’t switch regularly could be paying around £250 more per year than they need to. That’s not a small amount, and it’s money that doesn’t need to be spent.
What does the price cap actually mean for your bill?
The price cap sets limits on the unit rate and standing charge that energy companies can charge households on variable tariffs. It gets reviewed every quarter, and when it goes up, bills go up with it. It doesn’t cap what you actually pay in total, just the rate per unit, so how much you spend still depends on how much energy you use.
If you’re on a variable tariff, you move up and down with the cap automatically. That means when it rises, as it did in July, your bills increase without you doing anything or agreeing to anything. About 60% of UK households are on variable tariffs, which means the majority of people are directly exposed to those changes every time Ofgem adjusts the rate.
Fixed deals can be cheaper, but you need to look.
A fixed tariff locks your unit rate in for a set period, usually 12, 18, or 24 months. During that time, your rate doesn’t change, regardless of what the cap does. Right now, there are fixed deals available that sit below the current variable rate, which means switching could save you money for the next year or two without you having to do anything differently in terms of how much energy you use.
The catch is that fixed deals come with exit fees if you leave before the term ends, so it’s worth reading the small print before you commit. Some have no exit fees at all, which gives you more flexibility. Comparing what’s available through an independent comparison site takes less time than most people expect, usually around 20 minutes once you’ve got your usage figures to hand.
Finding your usage figures is easier than it sounds.
The most accurate way to compare tariffs is to use your actual annual usage rather than an estimated figure. Your supplier’s app, your online account, or a recent annual statement should all show you how many kilowatt hours of gas and electricity you used in the past year. Putting that into a comparison will give you a realistic idea of what you’d pay on any given tariff, rather than a figure based on someone else’s usage pattern.
If you have a smart meter, some comparison tools can pull your usage data automatically, which saves even that step. If you don’t, it’s worth spending five minutes finding the numbers yourself. The difference between comparing on actual usage versus an estimated figure can be meaningful because suppliers adjust direct debits based on what you actually use, and an underestimate can lead to a surprise bill later.
Switching is much simpler than it used to be.
A lot of people avoid switching because they remember it being complicated or worry about their supply being interrupted. Neither of those things is really a concern anymore. The process is handled almost entirely by the new supplier, there’s no gap in your energy supply, and most switches complete within a couple of weeks. You give some basic details, confirm the deal, and the rest happens in the background.
You can also switch in the last 49 days of a fixed deal without paying exit fees, which you need to know if you’re coming to the end of a contract soon. Your supplier is supposed to notify you 49 days before your deal ends, but it’s easy to miss or forget. Setting a reminder yourself when you sign up means you won’t drift onto the variable rate by accident when the fixed period finishes.
Automated switching tools exist if you don’t want to think about it.
If the idea of remembering to check your tariff every year feels like something you’ll never actually do, there are services that track your energy spending and switch you automatically when a better deal becomes available. You set it up once, and it handles the rest, including monitoring when your contract ends and finding a replacement before you roll onto a higher rate.
These tools vary in how they work and what they cost, so make sure you read the terms before signing up for any of them. Some are free and earn a referral fee from suppliers, others charge a small fee. Either way, the concept is useful for anyone who knows they won’t stay on top of it manually, which is most people if they’re being realistic.
There are other things worth checking on your bill.
The unit rate gets most of the attention, but the standing charge should be looked at, too. That’s the fixed daily amount you pay just for being connected to the grid, regardless of how much energy you use. It varies between suppliers and tariffs and can add up to a meaningful sum over a year, particularly if your actual usage is relatively low.
Direct debit amounts are another one. Suppliers calculate these based on estimated annual usage, and they don’t always get it right. If you’ve been paying more than you’ve been using, there could be credit sitting in your account. Check periodically, and ask for a refund if the balance is considerable because that money is yours and there’s no benefit to leaving it with the supplier.
Cheaper tariffs aren’t the only way to reduce what you’re paying.
Switching deals with the rate you’re charged, but your usage affects the total just as much. A few consistent habits can make a noticeable difference over a year. Washing clothes at 30 degrees uses much less energy than 40. Turning appliances off at the wall rather than leaving them on standby removes a small but constant draw. Bleeding radiators before winter makes the heating more efficient. None of these are dramatic changes, but they add up.
Draught-proofing is one of the more effective low-cost things you can do if your home is older. Gaps around doors, windows, and letterboxes let warm air out and cold air in, which means the heating has to work harder to maintain the same temperature. Foam draught excluders and door brushes are cheap and easy to fit, and the difference in heat retention can be noticeable fairly quickly.
If you’re struggling with bills, help is available.
Several major suppliers have hardship funds and emergency grants for customers who are truly struggling to keep up. British Gas, Octopus, EDF, E.ON, and Scottish Power all offer some form of support, though the amounts and eligibility criteria vary. Contacting your supplier directly is the first step, and it’s better to do that before falling into debt rather than after.
The Warm Home Discount is also still running and provides a £150 payment to eligible low-income households, applied directly to your bill rather than paid as cash. Eligibility is linked to certain benefits and income levels, so check whether you qualify if your finances are tight. The Priority Services Register is free to join and provides extra support and protections for elderly or vulnerable households, including advance notice of planned outages and free gas safety checks.
