How to slash your energy bills

Scottish Power has become the latest energy supplier to announce inflation-busting price hikes. So what can you do about it? Tim Bennett explains.

British households face another winter of discontent' after Scottish Power became the latest utility provider to raise its energy bills by an inflation-busting 7%. The move will affect around 2.3 million customers and increases the average price of a duel-fuel (electricity and gas) deal by £100 a year.

Scottish Power joins three of the other big six' energy companies (those being British Gas, NPower and SSE) in announcing steep winter price rises. Only EON and EDF have yet to declare their hand. So how are our energy companies trying to justify these whopping rises? And more importantly, what can you do about it, if anything?

Scottish Power gave three reasons for the latest hike. It reckons the cost of complying with various government energy-efficiency schemes has risen by 34%; the cost of getting gas to houses has risen 11%; and lastly, the wholesale price of gas (the price it pays) is up by 8%. The first excuse is plausible.

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The government's renewable energy targets commit us all to some pretty inefficient sources of power, such as wind farms green power isn't cheap. The second may also be fair. But what grates is that last excuse wholesale prices are actually down a bit on where they were 12 months ago, and below their 2011 peak.

The gas companies blame timing issues for retail prices having to rise, but the fact that companies who effectively represent half the market have acted together in the space of four days "makes it hard for consumers to believe that price rises are driven by real supply and demand issues", as Adam Scorer of Consumer Focus puts it.

Sadly, consumers' opinions about these rises clearly aren't top of the gas companies' priority lists right now. So what can you do to cut your costs? The best option is to try and lock in the cheapest fixed deal you can as fast as you can. Some deals let you lock in your energy prices for two winters. A site such as will give you a quick comparison across the major suppliers.

If you can't currently switch, perhaps because you are on a pre-paid deal or face exit penalties from your existing supplier, then you have little choice but to wait. However, this could pay off if the remaining two big suppliers declare better deals at the last minute.

The other obvious thing to try to do is cut back on your energy use. Since it isn't always easy to work out exactly where you are being inefficient, a good starting point is an energy monitor a handheld device that estimates how much energy you are using as you go along, and therefore where you might be able to cut back. Ask your supplier, they may offer one for free.

Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.