Many households across the UK are at risk of falling into financial difficulty this winter due to the soaring cost of energy, petrol and food. The end of the government’s pandemic income support schemes and the controversial Universal Credit cuts have also compounded the issue, according to analysis from the Financial Conduct Authority (FCA).
In this article, we look at why the cost of living is increasing, and our top 10 tips on how to reduce your household bills so you can save as much money as possible.
Why is the cost of living going up?
Energy
Energy prices are expected to rise by 'at least' £442 on average this winter, according to research by Scottish Friendly. Some analysts are suggesting that the current consumer energy price cap of £1,277 could rise by as much as £800, with regulator Ofgem warning it will have to “adjust” the threshold next spring to reflect the severe shortages squeezing the market. This would take annual household bills beyond the £2,000 mark for the first time in British history.
Petrol
Meanwhile, petrol prices are also on the up as forecourts run low - and run out - due to a shortage of HGV drivers needed to transport fuel to garages around the UK. Earlier this month, the army was drafted in to help keep up with the demand as thousands queued to fill up their tanks across the country. Scottish Friendly has warned that if unleaded prices surpass £1.60 per litre, households could face an extra £700 of fuel costs per year. Unleaded petrol is already £136.2 per litre in London on average as of Monday 11 October 2021.
Food
Food prices have been gradually increasing over the course of the year, with the cost of household staples such as cereals and oils driving global food prices to a 10-year high, according to the UN Food and Agriculture Organisation. Now coupled with the lack of HGV drivers and a global shortage of CO2 - crucial for producing and storing foods such as meat and soft drinks - a number of suppliers including Kraft Heinz, PepsiCo and Nestle have warned of further price hikes to come. The fast-approaching Christmas rush may worsen the situation still.
10 ways to minimise your household bills
Saving money on your household bills could be a lot easier than you think. We take a look at 10 different ways you can shave pounds off your utilities.
1. Switch appliances off at the socket
Arguably the most tried-and-tested method of reducing your household bills - switch things off at the socket when you’re not using them. This can be anything from making sure to switch lights off when you leave a room to unplugging the kettle when you’re not actively boiling any water.
2. Get a smart meter
Smart meters are a type of gas and electricity meter which automatically send meter readings to your supplier, so that they can charge you more accurately for the amount you are using, and to reduce the risk that you will end up overpaying. Note that installing a smart meter will not automatically save you any money, but by monitoring your energy usage, it may help you to identify areas where you could cut costs.
3. Use energy-efficient appliances
Opt for energy-efficient appliances, such as dishwashers or washing machines. Appliances are rated on how much energy they consume during typical use on a scale from A+++ to G, with A+++ being the rating you want to optimise your energy usage and keep your bills as low as possible.
4. Remove any draughts
Plugging any cracks or gaps in your home could save around £20 per year in a typical household. Stop heat from escaping through gaps around doors or windows by using draught-proofing strips or investing in draught excluders. Unused chimneys and fireplaces can be sealed with a chimney cap or inflatable pillow, which could save you a further £15 a year.
5. Use LED light bulbs
Switching to LED or energy-saving light bulbs could save you up to £180 per year on your electricity bills, according to Which?. Although LED bulbs are typically more expensive up front, the Energy Savings Trust estimates that the average UK household could save as much as £40 per year by installing LEDs in all of their bulbs.
6. Invest in a slow-cooker
A creative way to save money on your energy bills and feed your family at the same time is to invest in a slow cooker. Using a slow cooker throughout the day only uses about as much energy as a light bulb, with the added bonus of a tasty meal when you get home in the evening. Plus, if you use an energy-efficient microwave to reheat leftovers, you’ll be saving money on seconds too.
7. Turn down your heating
Turning down the heating by just 1°C could cut your heating bill by over 10%, or £75 per year, according to the Energy Saving Trust. With heating already accounting for about 55% of the average household's energy bills, and the highest proportion of household carbon emissions, turning the heating down just a notch or two could save you money and help save the planet too.
8. Get a new boiler
Modern combi boilers - boasting A+++ energy ratings - could save you hundreds of pounds per year compared to older models. Upgrading a G-rated gas boiler to a new A-rated condensing model - with a programmer, room thermostat and thermostatic radiator valves - could slash your fuel bills by over £300 over the course of a year according to the Energy Saving Trust. The only downside is the hefty cost of a new boiler, which can amount to as much as £4,000 when you include installation fees.
9. Get 25% off your council tax bill if you live alone
If there is only one person living in a household, they may be eligible for a 25% reduction in their council tax bill, which could save you hundreds of pounds per year. To find out if you can get a reduction, you can check your eligibility on the GOV.UK website or contact your local authority’s council tax department.
10. Check if you’re eligible for a home energy grant
Some households may be eligible for a government-sponsored home energy grant to put towards the cost of making your house more energy-efficient and saving you money on utilities in the process. You may also get a financial reward for using renewable heat or selling your own renewable energy back to the National Grid. Find out more about what grants and schemes you may be eligible for on the Simple Energy Advice website.
