Energy Bills for single households, everything you need to know

Are you stunned by your ever-increasing energy bills?  If you’re single and living in what the government describe as a one-person household the chances are that your energy bills will be a far higher percentage of your disposable income than couples or families living ‘next door’.

Are you getting the best deal?

The draft energy bill announced in October by the government putting a temporary price cap on standard variable tariffs will be welcome news for everyone, especially for the 12 million households; both family and single person households who haven’t switched at all, or aren’t on fixed price tariffs.

Energy Regulator warned to ‘protect your customers’

The Energy Regulator has now been warned that it must protect customers. Standard variable tariff which can quite literally, cost hundreds of pounds more than the cheapest deals on offer will be capped as soon as possible. This is NOT a cap on your bill, but a cap on standard variable tariffs so that energy companies will then have to put a limit on how much they can charge, effectively per kilowatt hour, on that particular tariff.

Expensive standard variable tariffs ‘not being priced fairly’

Most of us, about 12 million households are on these tariffs. They’re the default deals offered by most energy companies. So even if you signed up for one of those cheaper fixed deals, so if  like most people you’re not already on top of it and have another fixed term deal lined up when that fixed term is over, you usually end up on a standard variable tariff, normally around 25% more expensive than the supplier’s other deals.

Despite all the awareness campaigns & comparison websites encouraging us to switch it’s still felt that not enough people are switching to cheaper deals. That’s why a lot of people and energy champions think a cap to make sure people get a fair price is the only answer.

There are some price caps already in place for some types of customers, for those on a pre-payment meters, and for vulnerable households, where there are already plans to extend existing price caps.

Giving the regulator more powers to put a cap on standard variable tariffs is expected to save those other households around £100 a year, but it will all depend on exactly where that cap is put in place when the government bill becomes law.

How is your bill calculated and what does that mean if you’re a single household?

What exactly are you charged for? The price that you pay for your energy is made up of two different charges:

  • STANDING CHARGE – a fixed amount that you are charged every day regardless of how many people live in the household or much gas or electricity you use. Energy companies say that its used to pay their operating costs associated with the supply of gas and electricity.
  • UNIT RATE – this is the price you will pay per unit (kWh) of energy used. You pay for what you use, so it can fluctuate depending the time of year and what you use. Some tariffs may offer a variable cost per kWh, such as the Economy 7 tariff. where you pay a different price for electricity at different times of the day, generally cheaper at night.

WASTED ENERGY = WASTED MONEY

How energy companies work out your bill

When calculating the price of your bill, energy providers monitor how many kilowatt hours of gas or electricity you have used over a certain period of time, and then multiply this by the price per unit set in your tariff. The number of days the billing period covers is then multiplied by the tariff’s daily standing charge cost. The two figures are then added together to provide your total bill.

Did you know?

Gas and electricity units are measured in is kilowatt hours (kWh), 1,000 watts. One kWh of gas is equivalent to using a small gas hob burner for about an hour. A kWh of electricity is about the equivalent of using your washing machine for around an hour,  or turning on a 100 watt light bulb for 10 hours.

Unless you’ve switched to a fixed rate tariff, the price of energy per kWh can go up and down. Sadly, this doesn’t mean you can use as much electricity as you like and pay a set fee, but instead that you pay a fixed price per kWh for the duration of your tariff, regardless of how much the price on the market goes up and down.

Although we can’t do much about the standing charge common to all households, large and small, we (single households) can all use all sorts of ways to make energy savings, benefiting our own pocket and the planet.

  • CHANGE YOUR ENERGY SUPPLIER. USE A SWITCH COMPARISON SITE.
    Whether you rent or buy, switching energy providers can literally save you hundreds of pounds on your utility bills. The easiest way to bring down the cost of your bill is to compare prices with other providers and see if switching and / or fixing can get you a cheaper deal.
  • PAY DIFFERENTLY.
    Pay by direct debit, go paperless, opt for dual tariffs. Utility companies like these options as it saves on their administration costs. Each OR all three of these things usually make you eligible for discounted bills and some good savings. (Not only is direct debit cheaper you won’t have to worry about missing payments).
  • JUST USE LESS OF THE STUFF (EVERY LITTLE HELPS).
    OK this is obvious, but the less energy you use the lower your bills and the more money you have to spend on other things. Regardless of how much you pay per kWh many people find they pay more than they should. Leaving appliances on standby, using old style light bulbs rather than energy saving bulbs all add extra cost to your bill. Taking simple steps around the house, such as turning lights off when they’re not being used and turning appliances off at the wall can also make a big difference to your electricity bills.
  • MAKE YOUR HOME MORE ECO-FRIENDLY.
    Everything from looking into better insulation, replacing your old boiler with a more energy efficient one, buying more energy efficient appliances when your old ones die right through to installing solar panels. There’s lots of options out there which could help you save up to £100’s of pounds a year and help the environment.