Finance: Expert on impact of inflation on savings accounts
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Many households will be taken by surprise by this sharp rise in energy prices, as providers will be unable to introduce incremental changes to their customers ahead of time. On top of this, families across the country will have to manage the bill uptake during a time when much of the financial support offered by the Government during the pandemic is being rolled back, such as the £20 weekly rise on Universal Credit payments. Speaking in July, energy regulator Ofgem’s Chief Executive Jonathan Brearley warned the British public of the severity of the upcoming winter price hike.
“I know that the last 18 months have been tough for many households as a result of the COVID-19 crisis,” he said.
“Rising inflation and the forthcoming end of the furlough scheme on top of the impact that the pandemic has had on people’s livelihoods means that family finances are tight now.
“Unfortunately, against this backdrop I am today alerting customers that global prices for fossil fuels, especially gas, are increasing at an unprecedented rate.
“Ultimately this will feed into all customer energy bills in the UK.
“One of the most important tools we have to ensure that customers pay a fair price for their energy, and no more, is the price cap.
“This caps the price that companies can charge customers who have not recently changed their tariff or energy supplier and allows them only to charge legitimate costs.
“Regrettably, the increase in wholesale costs will feed through to this price cap and, although final analysis is not complete and other costs will also determine the overall level, it could add around £150 per household to the next level of the price cap.”
However, to help families survive the winter months and save money for their energy bills, some experts are outlining how households can save upwards of £1,500.
Kevin Pratt, from price comparison and financial guidance platform Forbes Advisor, is providing advice to those concerned about coping with the winter price hike.
Mr Pratt has 12 “easily actionable” tips for homeowners in order for them to save money on their energy bills in 2021.
Switch off standby
This tip can save families up to £30 a year. Remembering to turn appliances off rather than using standby mode is crucial for anyone looking to cut costs.
He explained: “Most electrical and electronic appliances are safe to turn off at the plug without it affecting their programming – although it is best to check the user manual to be sure.
“You could even consider using a ‘standby saver’ that turns all devices off in one go. |You’ll also save electricity by not leaving laptops and mobile phones charging unnecessarily and by unplugging charger cables when they are not in use.”
Look after the kitchen
Mr Pratt estimates that households can save £36 a year just by caring for their kitchen space.
This includes using a bowl to wash up instead of using a tap, which saves £25. Also, reducing how much you use your washing machine by just one cycle a week can save £5 a year.
Switch to energy-efficient appliances
Replacing appliances such as a fridge, dishwasher or washing machine, with one which has a high energy efficiency rating can save £275.
“All new appliances must have an energy efficiency certificate which rates appliances from A+++ to G. The highest and most efficient rating is A+++, while the lowest is G,” Mr Pratt said.
“These ratings are based on the amount of energy each appliance uses, so the higher the rating, the fewer units of energy it uses.”
Be careful when using thermostat
Turning down your thermostat by one degree can reduce heating bills by £80 a year, according to the financial expert.
He added: “It can also be worth investing in a smart thermostat so that only the rooms you are using are heated.”
Replace shower head
Switching to a water efficient shower head will reduce your hot water usage and save you a decent sum of money, according to Energy Saving Trust.
Mr Pratt believes this could save families £70 a year on gas for water heating, as well as £115 a year on water bills for families who have a water meter.
Spend less time in the shower
Cutting down the length of time you spend in the shower can also cut your energy bill by £75.
Mr Pratt said: “As well as changing your shower head, reducing the amount of time you spend in the shower by just one minute every day can slice up to £7 off your annual energy bill, per person.”
Replace the boiler
While being a major cost initially, replacing your boiler could prove to be a worthwhile long-term investment for those looking to save. The financial expert believes this could save £315 a year.
“If your boiler is more than 15 years old, it’s probably worth replacing it with a more modern energy-efficient A-rated model,” he explained.
“All modern boilers are condensing boilers which means they have a larger heat exchanger and make better use of the heat they generate from burning fuels such as oil or gas.”
By reducing how much heat escapes from your home, you can save up to £20 a year in energy bills.
Mr Pratt explained: “As well as using draught-excluders on the bottom of doors, consider putting draught-proofing strips around window frames and sealing cracks in floors and skirting boards.”
Switch to LEDs
Using LED spotlights can reduce a household’s bill by £35 a year, as they use far less electricity than the average bill.
“LEDs are now bright enough to replace halogen bulbs and they come in a wide range of shapes, sizes and fittings.”
Turn the lights off
If households turn their lights off around the home when they are not in use, they can save £14 a year.
“The Energy Saving Trust says that switching off a light for just a few seconds will save more energy than it takes for the light to start up again, no matter what type of light it is,” he explained.
Insulate your home
Insulating your walls and loft can save families around £255 a year.
Mr Pratt added: “A quarter of heat is lost through the roof in an uninsulated home and about a third through the walls.
“It’s therefore worth considering whether you’re happy to spend a few hundred pounds getting a professional in to fully insulate your property.”
Switch energy suppliers
Cruising the energy provider market could also save households a whopping £328 a year, according to Forbers.
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