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Did you know that energy prices have more than doubled over the last decade or so? This continued price rise has made it harder for normal families to continue powering their home at an affordable cost. And it’s something that doesn’t look set to change any time soon. If you’re worried about increasing energy costs, then you’re in the right place.
In this article, we’re going to look at a few reasons why energy has become so expensive in the UK, and what these trends mean for the future of the UK energy market. We’re also going to look at a few tips so you can actually do something about it – and hopefully reduce energy costs a bit around the home.
Why have energy costs increased so much?
According to OfGem, UK energy suppliers are under pressure from a number of external factors which mean they have to pass these costs on to their customers (that’s you). A lot of this has to do with the rising cost of energy worldwide to these energy suppliers. It’s not a problem that’s unique to the UK, but energy is simply getting more expensive across the planet, and this is why your energy bill has been going up (and why it might continue to do so).
This year has been one of the worse for energy price rises. An average of £74 has been added to a household energy bills. That’s one of the biggest individual increases ever seen. Some homes have seen their fuel cost rise by 7% or more, and this doesn’t really show many signs of slowing down.
You might be wondering why exactly these fuel prices have risen so much? It’s an obvious question, but it’s one that has a few different answers. Some of it is to due with recent weather issues that lead to a depletion of gas stores for fuel providers and lead many of them to buy more gas at a time when they don’t usually. This has affected the worldwide cost of gas a fair bit. Another reason for the rise is because of an increase in the cost of carbon thanks to carbon trading reforms. All of these factors have generally made energy most expensive, and it’s these costs that are often passed on to the consumer.
What can you do to reduce the cost of energy in your home?
If you’re a bit worried about the continued hike in energy prices, you’re not alone. The UK Government has actually recently capped energy costs for those on default tariffs. This could provide a bit of security for those who need it the most, but it’s not clear whether these caps will be long-term, and they don’t affect everyone.
So what other options are there for reducing energy costs?
Firstly, you need to shop around. One benefit of a decentralised energy market with many different energy companies is that there’s a ton of competition for new customers. While all of these energy companies get their fuel from the same places (and pay roughly the same amount), they’re so eager for your business that prices and introductory offers could fluctuate quite a lot.
Just because you’ve been with the same supplier for a while, that doesn’t mean you can’t get much cheaper energy elsewhere. Some people ignore these savings as they know all the energy comes from the same place and costs a similar amount to your supplier. But that doesn’t mean it costs you the same amount. So you’ll want to shop around to make sure you’re getting the best offer.
The first step is to compare energy providers on moneyexpert.com. Simply enter a few details and you’ll be presented with a wide range of competitive quotes. Many of these could be quite a lot lower than what you’re currently paying. People can be nervous about switching energy suppliers, but they needn’t be these days. It’s a much simpler process than you might think, and one that could save you a lot of money.
There are other energy reduction tips could put in place. Like cutting back on appliance use or even installing solar panelling. But sometimes, the simplest and easiest is to just get cheaper energy.
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Disclosure – this is a collaborative post