It’s happening again folks: gas and electricity prices are rising from January 1, 2025 – and Martin Lewis has some advice to help you avoid getting stung by hikes.
In the latest edition of his Money Saving Expert newsletter, the financial guru discussed the the Energy Price Cap, which is shortly due to go up by around 1%, following a hefty 10% average increase in October.
As of New Year’s Day, the unit rate for electricity will be 24.86p per kilowatt hour, with standing charges (the fixed daily fee you pay, even if you use no electricity – at 60.97p per day.
Gas, meanwhile, clocks in at 6.34kWh and now has a standing charge of 31.65p per day.
Bear in mind, the actual rates you’re charged vary slightly from region to region, and will differ depending on how you pay your bill and the type of meter you have. This will also change again from March 31, as Ofgem announces a new cap every three months.
More than 85% of people in England, Scotland and Wales will be impacted by the new cap though, and homes with typical use who pay by direct debit will see their bills rise by around £21 annually, totalling to £1,738.
And while this may not seem like much of an increase to some, the regulator claims UK households could potentially overpay by a collective £66 million if they don’t take action.
If you’ve got a working smart meter at home, you don’t need to do anything as it’ll be accurately giving readings to your supplier from January 1.
But for an estimated 48 million of us in the UK, (those without smart meters), Martin Lewis and the team have warned there’s an important step you need to take so you aren’t charged more than you should be.
The expert recommends giving an up-to-date meter reading to your energy company in the coming days, in order to ‘reduce the risk that your supplier estimates that you’ve used more at the new higher rate than you have’.
However, you need to be tactical about when you do this.
If millions of people all rush to give a meter reading at the same time, this could cause a few issues — suppliers’ websites could crash and phone lines could become jammed, which may affect vulnerable people in need of assistance.
In order to avoid this, you should submit your reading a few days either side of the change (giving yourself until Friday, January 3 mean you have three days left) or take note of your reading and submit it after the price cap rise, as some companies allow you to backdate your reading.
According to Martin, if you submit your readings within this time period, ‘any discrepancy [with your energy charges] should be minor’.
How can I lower my energy bills?
‘The price cap increase will come as a blow to many households, many of whom are already struggling with the high cost of living,’ Amy Knight, personal finance expert at the financial comparison website NerdWallet UK, told Metro.
‘While cutting down on energy use can help save money on bills, this isn’t always an option. Instead, focus on getting more value from the money you spend heating your home.’
Here are Amy’s top tips to keep fuel bills low this winter:
Consider carefully before you switch energy provider
If you’re thinking of switching energy provider, discounted rates for new customers can lead to savings. But, take note of when the introductory period ends to avoid a nasty shock when your bill jumps up again.
If you’re already on a fixed deal that’s more expensive than the price cap, it may be worth seeing if you can switch to a cheaper variable tariff or a cheaper fixed deal. But, if you do decide to leave your current fix, you should first check if you need to pay any penalty fees.
Ask for a refund if you’re overpaying into your energy bill by direct debit
If you’re several hundreds or even thousands in credit, your direct debit is probably set too high.
You can ask for a refund of most of the balance and adjust your direct debit to be lower. Be aware though, it is normal to be in credit this time of year because most households use less energy in the summer versus the winter when we have the heating on.
How hot do you need your water?
Heating water uses a lot of energy, so you can turn down the flow temperature of your boiler to shave a little off your bills.
As long as the water from your hot tap is comfortable to have a bath in, you don’t need to set it any hotter. You can do this manually or you may be able to ask a heating engineer to fit a device called a ‘weather compensator’.
Remember where warm air comes from
Keep radiators uncovered to maximise the benefit when they’re on. If you have long curtains covering your radiators, leave them open to make sure the warm air circulates into the room, not out of the window.
Look at the label
When shopping for a new appliance such as a washing machine or fridge, look at the efficiency ratings. If your budget can stretch to A or B-rated white goods, these can help lower your energy usage long term.
How and when to submit a meter reading
Customers with British Gas, EDF Energy, E.on Next, Octopus Energy, Ovo Energy, Scottish Power, So Energy, or Utility Warehouse can submit meter readings via their online account, the company app, or over the phone.
Some companies also now let you send your readings via text message or through WhatsApp, but you’ll need to check with your energy provider whether they allow this.
When taking meter readings, always be sure to take a photo of your meter, so you have the info to hand and proof of the exact day/time you took the reading.
For British Gas you can backdate your meter readings until January 14, but for EDF Energy the cutoff date is January 9.
Octopus customers can backdate their readings until January 8 and Ovo Energy has set a cut-off of January 11, while E.on Next users only have until January 6. For Scottish Power there’s a little less time as the backdated readings must be submitted by January 5.
So Energy Customers are able to backdate their readings, but only if they have proof of the day they took the reading on.
However, those with Utility Warehouse are being encouraged not to backdate readings, and instead submit them before the new cap is in effect on January 1 — so you best hurry.
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