Oil prices have fallen sharply since reaching a record high of $147 a barrel in July, now teetering close to $63 a barrel, while wholesale gas prices have plummeted by 19% since the latest round of price hikes. With a colder than expected winter on the cards, consumers and industry watchdogs alike want to see price reductions implemented now, with Energy Secretary Ed Miliband even going as far as to state that he was willing to legislate to force firms to offer fairer prices, particularly to the poorest customers such as those on prepayment meters.
Despite this however, the gas and electricity companies are holding firm. They point out that oil prices have slumped due to fears over consumption levels in the current economic climate - so when demand increases, so will prices. To make matters worse there are growing concerns over a gas cartel between Russia, Qatar and Iran, who collectively own 60% of the world's gas reserves, and could drive up prices.
In addition, energy suppliers tend to buy their energy in advance - therefore the energy we use over winter is likely to have been bought at the higher prices from earlier this year, meaning lower costs can not be passed on. Consequently, price cuts aren't likely to filter through to consumers until next spring. We look at what's driving gas and electricity companies to keep prices high in our latest video blog, 'Energy pain continues'.
So with prices almost certain to remain high over the winter months, what can consumers do to drive their bills down? Here are our top 10 tips:
Switch to a more competitive deal
Despite high prices there is still competition in the energy market and you can probably find a cheaper deal. By using a comparison website such as our gas and electricity comparison tool you can find out how much each supplier charges in your area and switch to the cheapest tariff.
Currently the cheapest tariff for new customers in the UK is British Gas Click Energy 6, which charges £1,056.86 on average across the UK. By comparison the British Gas standard tariff costs £1,328.19 on average - so you could secure a saving of more than £300 just by moving to a different deal from the same provider.
Indeed paying by online direct debit is the cheapest option for customers with any of the 'big six' energy providers - British Gas, Npower, E.ON, EDF Energy, Scottish Power and Scottish & Southern. So even if you're perfectly happy with your existing provider's service you can still find a cheaper deal without the hassle of moving to a supplier you're unfamiliar with.
Don't overpay
It is estimated that UK households waste more than £50 million a year in unnecessary charges because their bills are based on estimates. It's vital to ensure you take regular readings to avoid over or underpaying.
Even if you never seem to be in when someone comes round to read the meter, it doesn't matter. You can take your own meter reading and give them to your provider over the phone or internet.
Take advantage of benefits
If you're in a fuel-poor household you could be entitled to a significant rebate. For example, if you're aged over 60 you may qualify for a Winter Fuel Payment of £250 or more, which should be paid automatically if you have a state pension. If you're over 60 and you are not receiving the payment call the helpline on 08459 151515 from 8:30am to 4:30pm Monday-Friday.
In addition there are social tariffs available from all six major energy providers with discounts of up to £300 a year. There is no set eligibility criteria: if you're disabled, elderly, have a family with small children or receive income support you may well qualify, so contact your provider and ask.
Use the Warm Front Scheme
Government grants of up to £4,000 are available through the Warm Front Scheme to help cover the cost of insulating roofs and walls, draft prevention, repairing faulty boilers and assessing your home's energy status. All of this could save you £100s on your energy bills each year. Those over 60, on income support or in receipt of council tax benefit, housing benefit, pension credit or jobseeker's allowance should apply as should householders with a child under 16. There are several other benefits which are applicable so to see if you qualify call 0800 072 9006.
Perform a Home Energy Check
The Energy Saving Trust offers a Home Energy Check which it estimates could help you save as much as £340 a year. All you need to do is fill out some questions on its website and it will give you a personalised report showing you how much energy you can save in your home.
Turn off the lights
Make sure you turn off the lights when you leave a room and consider investing in energy saving light bulbs. An energy saving light bulb costs around £1.50, so is much more expensive than a traditional light bulb at around 25p. However, it will usually last around 12 times longer - by comparison 12 standard light bulbs would cost around £3.
Don't leave appliances on standby
Don't leave your computer 'on sleep' - it will still use up to 75% of its energy, collectively costing British households £800 million a year. Take the time to shut your computer down properly at the end of each use and pay close attention to other household electronics too.
The little red light on TVs uses around £116 million of energy every year, while DVD and video players consume more than £225 million while on standby.
Buy economical products
If your washing machine, fridge-freezer or kettle is at the end of its lifespan, replace it with an eco-friendly alternative. An energy efficient fridge-freezer for example, uses only a third of the energy of a 10-year-old model while an energy efficient washing machine can use a third less energy than an older model and cut water consumption.
Look for products rated 'A+' and think about how you use the items when you have them. Don't boil more water than you need to, only wash with a full load, set the cycle at a lower temperature and don't leave fridge doors open for longer than necessary.
Invest in insulation
Even if you don't qualify for the Warm Front Scheme it's still worthwhile investing in insulation. Loft insulation costs around £200-£255 but could save you £155 every year so it'll pay for itself in less than two years. Cavity wall insulation can cost as little as £150 but could save you just as much in one year, while floor insulation will cost around £90 and save approximately £40 a year.
Simple ways to save
There are many other simple lifestyle adjustments you can make to save energy. These include taking a shower instead of a bath; moving furniture away from radiators; investing in thicker curtains to retain heat; buying a lagging jacket for your hot water cylinder and draught proofing your home. For more on these ideas, check out our article 'energy saving tips'.
Have your say: What are your tips to save money and energy? Visit our forum and share your ideas with our community.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.
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