Q My energy provider contacted me recently to say we should adjust our direct debit because we are using more energy and this was putting our energy bills in arrears. But I’ve just seen that the price cap has come down again so shouldn’t my bills come down too?   

A In recent years some energy companies have exploited direct debits so outrageously, that there are calls to reform the entire system.

Your provider might be suggesting you should change your direct debit, but in practice they are saying they will… unless you object. 

The problem with direct debits is that they allow businesses to change the amount of money you pay and when you pay it.  

According to the Direct Debit Guarantee, the business has to give you at least 10 working days notification of any changes it wants to make, but this is often done by email, which means most people don’t notice until it’s too late.

It would be very easy to send a few texts instead which would at least warn people about the size of their energy bills, but strangely, there’s a total lack of interest in doing so from most energy businesses. 

But I digress. The number one question that people ask me about energy bills at the moment is: why are my bills going up when the prices are coming down? 

The reasons for this are complicated, but might include one or a combination of the following factors: 

1. Your meter is giving faulty readings. 

2. You’ve significantly changed your energy consumption. 

3. Your actual energy usage has been disguised by credit you’ve built up on your account reducing your bill over winter. 

4. Your current energy agreement has ended and you’ve ‘defaulted’ on to a standard tariff, 

5. The business has been relying on estimated readings, but now they have an actual reading, they have ‘back billed’ you for your actual energy consumption. 

6. There has been a billing error. 

That’s quite a lot to contend with, but ultimately, it’s for your energy provider to establish what’s going wrong with your bill, but there are a few things you can do too. 

Energy bills are ridiculously complicated, so it’s hard to know if they are right or not. But here are a few pointers. 

The cost of your bill will have increased over the last two years because of the crisis in the energy wholesale market. But what you need to look for is an increase in the units of energy you use. This is especially important if you haven’t been using more energy.

Ask our experts your money questions

Start by going through your last two years of bills. Work out roughly how much you’re using on average for each billing period. If there’s been an inexplicable increase, you have a valid complaint. 

You can also ask your energy provider to clarify in plain English why things have changed. Ask them things like; why your energy usage is higher, if they are relying on estimated readings, if they are billing you for energy used over a year ago and if you’re on the cheapest tariff. 

If your energy company sends you a new bill that covers a period older than 12 months, they should not be charging you for it. This is known as ‘back billing’ and is explicitly forbidden by regulator Ofgem.  

However, if you have an existing debt that you were correctly billed for at the time, the energy firm can pursue it for up to six years.   

If you have a smart meter, it’s estimated that just under four million of them aren’t working properly. Smart meter problems are the second biggest area of complaints after billing disputes. Problems can arise from technical problems with the meter or the data not being transmitted correctly. 

To resolve the problem you will usually be asked to take meter readings every day for around a week to assess the problem. I’d recommend photographing your meter readings so you can prove they are correct. 

The energy firm is obliged to identify and correct the situation with the meter. This could involve sending out an engineer to assess the meter’s performance.   

Energy businesses are obliged to address all complaints in writing unless you agree otherwise. Their ‘final response’ should set out what they’ve done to resolve your complaint and any compensation that they might be offering. This should also tell you about your right to go to the Energy Ombudsman. 

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. https://martynjamesexpert.co.uk/articles/ 

Photo credits: Pexels

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For both environmental and financial reasons, more of us than ever are looking into ways of generating electricity from home, and home wind power is now a possible option

In a previous article for Mouthy Money I discussed solar PV panels. These are by a distance the most popular home generating option in the UK, typically nowadays in conjunction with battery energy storage systems. 

But another possibility is home wind power. The UK has no shortage of this natural resource. And wind can be a good source of energy at times when solar is limited or unavailable, e.g. in the winter or at night.

The most popular types of domestic wind turbine in the UK are building-mounted and pole-mounted. Building-mounted turbines are cheaper but generate less electricity. Pole (or tower) mounted models are more expensive (see below), but due to their greater output can actually pay for themselves faster [source]. 

But before you set your sights on harnessing home wind power, it’s essential to understand the feasibility and financial implications of doing this. 

Understanding home wind power

Domestic wind turbines, also known as small-scale or residential wind turbines, are designed to generate electricity for individual homes or small businesses. 

These turbines typically range from a few feet (in the case of building-mounted models) to 100 feet in height. They can be installed on rooftops or standalone poles, depending on the available space and local rules and regulations.

The principle behind wind turbines is simple: wind turns the turbine’s blades, which then rotate a generator to produce electricity. The amount of electricity generated depends on factors such as wind speed, turbine size, and efficiency.

Potential benefits

Clearly the main allure of domestic wind turbines is the potential for cost savings on electricity bills. 

By generating your own electricity, you can reduce reliance on traditional energy providers and potentially lower your costs. And in some cases excess electricity generated by the turbine can be sold back to the grid, providing additional savings or even income via the Government’s Smart Export Guarantee (SEG) scheme. The extent of these savings depends on various factors, however, including:

Wind strength: The viability of a wind turbine hinges on the availability of consistent and sufficiently strong winds. Areas with higher average wind speeds, such as beside the coast or on open land, are more suitable for wind energy generation. Conversely, homes in built-up areas or near tall trees are less likely to be suitable. As a rough guide, if the average wind speed in your area is under 5 metres per second, a wind turbine isn’t likely to be worthwhile [source].

Initial investment: Installing a wind turbine involves significant up-front costs, including the purchase of the turbine itself, installation and cabling, and any necessary permissions. These costs can vary considerably depending on the size and type of turbine – from as little as £2,000 for a rooftop one to £7,000-£70,000 for a freestanding model. As with solar panels, you will also need an inverter to change the DC power generated by the turbine to the AC used in UK homes.

Maintenance and repairs: Like any mechanical system, wind turbines require regular maintenance to ensure optimal performance and longevity. Maintenance costs should be factored into the overall financial equation.

Energy efficiency: The efficiency of the turbine and the electrical systems associated with it will influence the amount of electricity generated and, consequently, the potential savings.

Considerations and challenges

Before embarking on any domestic wind turbine project, various considerations and challenges must be addressed.

Location: Assessing the local wind resources is crucial. Conducting a thorough wind study or consulting with experts can help determine whether your location is suitable for wind-energy generation.

Space and aesthetics: Wind turbines, especially larger ones, require ample space and may impact the aesthetic appeal of your property. Consider how a turbine installation might affect your surroundings and neighbours.

Product lifespan: Wind turbines have a typical lifespan of twenty years. That is somewhat less than solar PV panels, which have a useful lifespan of 25 years or more.

Return on investment (ROI): Calculate the expected ROI based on your specific circumstances, including energy usage patterns, local incentives, and available financing options. While savings may accrue over time, it’s essential to realistically assess the payback period.

Battery integration: You will probably want the electricity from your wind turbine to charge a home storage battery, so it can be saved for when you need it rather than going to waste. 

Ideally this would be combined with solar PV, so the panels charge the batteries when the sun is shining and the wind does the same at other times, e.g. at night. Unfortunately most home storage batteries don’t offer this dual functionality at the moment, though that may come in time.

Planning permission

It isn’t always necessary to seek planning permission for domestic wind turbines, but they do need to conform to strict guidelines. In England, wind turbines can be classed as permitted development if:

• There are no other wind turbines in the area or an air source heat pump currently on the property.
• The bottom of the turbine’s blades is at least 5 metres from the ground.
• The turbine isn’t in a conservation area, World Heritage site, or on the grounds of a listed building.

In Scotland, planning permission won’t be required if:

• The wind turbine is the only one on the property.
• The turbine is more than 100 metres from another property’s boundaries.
• The turbine isn’t located in a conservation area, World Heritage site, or on the grounds of a listed building.

In Wales and Northern Ireland you’ll need planning permission for any wind turbine (domestic or otherwise). For installations in these parts of the UK, therefore, you will always need to submit a planning application [source].

• In addition, to benefit from financial incentives such as the Smart Export Guarantee, your wind turbine must be MCS (MIcrogeneration Certification Scheme) certified, and installed by an MCS-accredited installer.

The Ripple option

If a domestic wind turbine isn’t suitable for you, another interesting possibility is offered by a company called Ripple Energy. This is a pioneering platform that allows individuals and businesses to own part of a large-scale UK wind farm and have the electricity it generates supplied to their homes via the grid. Here’s how it works.

Shared ownership: With Ripple, you can buy a share of a renewable energy project managed by a co-operative. This co-operative is responsible for building and operating the wind farm.

One-time cost: You pay a one-time fee for your share of the construction. Ripple then builds the wind farm, and you become a co-owner.

Clean energy supply: Your energy supplier purchases the electricity generated by the wind farm and supplies it to your home through the grid. As a result, you get access to green electricity while stabilising your bills for the lifespan of the project. This should protect you from price spikes and reduce your electricity costs. 

Of course, as with any investment, there are some risks involved that you will need to weigh up carefully before deciding whether to proceed.

For further details, check out the Ripple Energy website.

Disclosure: I recently invested in a Scottish wind farm myself via Ripple.

Closing thoughts

Installing a domestic wind turbine can be a proactive step towards reducing your carbon footprint and lowering your energy costs. It’s not a one-size-fits-all solution, however. 

Careful consideration of various factors is required to ascertain whether it’s viable for your situation. Conducting thorough research, consulting with experts, and weighing up the costs and benefits are essential in order to make an informed decision about harnessing the power of the wind for your energy needs.

As always, if you have any comments about this article, please do leave them below.

Nick Daws writes for Pounds and Sense, a UK personal finance blog aimed especially (though not exclusively) at over-fifties.

Photo credits: Pexels

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Eight months on from the birth of our son, we have had nasty bill hike surprises as our household providers hike our direct debits.

The problem stems from the way in which our bills, primarily for energy and water, are collected. It has led, in quick succession, to a savage bill hike blitz that could have added £120 a month to our bills.

But instead of just taking it, I fought our providers and won back more than £500 a year.

The bill hike problem

Our energy and water bills are both metered. We have an energy smart meter so I don’t have to provide readings, and our water meter is checked every six months by our water company.

Now, our son was born at the end of October 2024, and it would be safe to say our usage of both services has increased.

We use the washing machine and tumble dryer more. We had the heating on more than usual to keep our house warmer for him in Winter. There are other things but these are probably the main additional drains on our usage.

Between water, gas and electric our usage has increased by roughly around 10% for each. This, when you track it in our bill statements, is pretty well immediately noticeable.

But here’s the problem: our providers don’t pay any attention to usage changes in the short term. They just hike their direct debit levels when you accrue an accidental deficit.

This meant that from October, our usage increased, but our direct debits did not.

Eight months on and the disparity in usage against what we were paying each month has enough of an affect that our water bill had a more than £200 discrepancy, while our energy stood closer to £500 in deficit.

I will admit at this point, I did not pay enough attention to the deficits on each as they rose, but the effect was incremental over months.

More from Edmund Greaves on Mouthy Money

Provider shenanigans

This came to a head all at once in the past few weeks. First water, then energy provider both got in touch with me to say our direct debits weren’t covering our usage.

For water, we were paying £50 a month. The provider now wanted £100 a month from us to cover the deficit.

Our energy provider was taking £130 a month from us, but it wanted £200 a month going forward.

This would have meant £120 a month in higher bills, something our budget would struggle to meet considering my partner Ellyn is still on maternity leave.

So I hit the phones to fight our corner.

In both cases I did some sums to figure out:

A. How much our monthly usage should cost, based on our consumption.

B. How much extra it would take, over 12 months, to pay our deficits back to £0.

For our water bill, this meant paying an extra £20 month. For energy, it would be £35. This versus attempted increases of £50 and £70 respectively (almost, suspiciously, as if both had just decided to more than double the difference).

The water company was more straightforward. We agreed to pay £70 a month, which over 12 months will bring us back to £0 deficit.

The energy company was more tricky, because you have to factor in the energy price cap. With the cap coming down in July, the level they had set our new bills at would have meant paying £2,400 a year, a mad amount.

In their own estimates we were going to use £1,672 (before the price cap decrease) in gas and electric or £139 a month, only a small amount more than our actual bill. With the price cap decrease – 8% reduction for electricity and 9% for gas – I reasoned that £1,522 a year would be likelier – or around £127 a month.

In order to beat our £500 deficit, I calculated that £165 a month would do it over 12 months with the above figures in mind.

This is what I reasoned to the (perfectly affable) call centre attendant on the phone. She accepted my calculations and the bill was duly adjusted.

And that was that, really.

As is the case with so many household service providers, from energy to insurance, the most important thing we can all do as customers is to stand our ground and push for a better deal.

This is increasingly difficult in markets such as energy, but there is still room to push back when companies try and take more of our money without actually improving their service levels.

Ultimately our bills have gone up, and I will now try and focus on how we reduce consumption, but we’re £55 a month worse off, not £120 thanks to a bit of calculation and effort. This means £540 a year in extra bill savings.

A win is a win these days, so I’ll take any day.

Photo by Mikhail Nilov

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Only a few years ago home storage batteries were very costly and hard for most people to justify. 

Times have changed, however, with the price of batteries falling while the cost of electricity has risen dramatically. 

So today I’m looking at the case for purchasing a battery energy storage system (or BESS as it’s sometimes called). This will apply principally if you have solar PV panels (or plan to get them) but may still be relevant even if you don’t. 

If you want more information on solar panels, I’ve already written a piece about the pros and cons of those here.

Below I’ll look at the pros and cons of home storage batteries and set out some other considerations to bear in mind. I will also reveal why I recently took the decision to get one myself (and what I chose).

Pros and Cons

Pros

Energy independence – In association with solar PV panels, batteries enable homeowners to generate and store their own energy, reducing their dependence on traditional grid-supplied electricity. This provides increased energy independence and potentially lower bills.

Back-up power supply – During power-cuts, home storage batteries can act as a back-up electricity supply. This may be especially valuable in emergencies or during periods of high demand on the grid.

Maximising solar power usage – Solar PV systems often generate more electricity than needed during sunny days. With storage batteries, this excess energy can be stored for later use, e.g. in the evening or overnight.

Environmental benefits – By storing solar energy and reducing reliance on the grid, homeowners contribute to a decrease in carbon emissions and potentially help combat climate change.

Reduced grid demand – Home storage batteries allow their owners to draw electricity from stored energy during peak hours, reducing the demand on the grid and potentially lowering their overall electricity bills (further discussed below).

Cons

Initial cost – The up-front cost of purchasing and installing home storage batteries can be substantial – almost certainly a few thousand pounds. While costs have fallen in recent years, this remains a significant barrier for some.

Limited energy storage capacity – The storage capacity of home storage batteries is limited, which may pose a challenge during periods of prolonged low sunlight. This could require homeowners to rely more heavily on the grid during such times.

Lifespan and maintenance – Home storage batteries have a finite lifespan, typically 10-15 years. This means they will likely have to be replaced at least once during the life of your panels. Otherwise home storage batteries are pretty low maintenance, but as with any technology problems can occur requiring repairs or replacements.

Space requirements – Modern lithium-ion batteries are fairly compact, but they do still need to go somewhere. They have to be positioned away from any direct heat sources, with reasonable ventilation around them. The garage or kitchen/utility room are popular choices. For homeowners with very limited space this could be a constraint, however.

Grid connection still necessary – Despite having storage batteries, a connection to the grid remains necessary for times when energy demand exceeds the stored capacity or during extended periods of low sunlight. You are unlikely to be able to live ‘off the grid’ entirely using solar PV battery storage.

Other considerations

Another factor to consider is that from February 2024 the VAT rate was reduced from 20% to 0% for all battery energy storage system installations. The reduction applies to both new and existing solar PV systems and also to stand-alone battery systems.

Effectively this change has cut the cost of buying a battery by 20%. The tax relief is due to end in March 2027 when VAT will be reimposed, though at a lower rate of 5%. Purely from a tax perspective, therefore, there will never be a better time to purchase a battery energy storage system than now!

Another thing to note is that while batteries are currently used mainly for storing energy generated by solar panels, there are other ways they can be deployed as well. For example, some energy companies currently offer electricity at lower prices at off-peak times. You could potentially charge your battery from the grid at cheap rates and then use electricity from the battery at peak times when you’re most likely to need it. 

In recent weeks it’s been suggested that energy companies may introduce ‘surge pricing’ to balance supply and demand. This would be controversial, but if it happens peak-rate electricity will cost more for everyone and off-peak less. Obviously, the potential savings for homeowners who can shift their electricity consumption times using batteries would be considerable.

In addition, you might be able to charge your battery from other ‘green’ sources such as a wind turbine (though this technology is not currently as accessible as it ought to be). I will discuss home wind turbines in more detail in a future article for Mouthy Money.

Finally, bear in mind that all batteries are not equal. Prices vary considerably, in line with battery type, storage capacity, and other features. For example, more expensive batteries may automatically switch to supplying power during outages, but with others you may need to have a manual EPS (emergency power supply) switch installed. This is a complex field, and it’s important to research the options carefully and take expert advice as required.

My own example

As anyone who read my recent article about solar panels will be aware, I have had a solar PV system in my home for a number of years. 

I’d been considering getting a battery storage system for a while, and the news that VAT was being cut to zero provided the extra incentive I needed to set the wheels in motion.

I had two main reasons for wanting a home storage battery. One was (of course) to save some money on my electricity bills. But in addition I liked the idea of gaining a degree of independence from the grid. 

With the planned transition to ‘greener’ electricity in place of fossil fuels, I expect that power cuts will become increasingly frequent in the next few years. So I wanted a system that will keep the lights (and power) in my house on, even if everywhere else in the neighbourhood is in darkness!

Anyway, I sought quotes from three home storage battery companies. The prices all came out broadly similar (like for like), so I chose a local company called The Energy Box who came to see me and impressed me the most.

I wanted a (hopefully) future-proof battery, so I paid a bit more for a 13.5 kW Givenergy ‘all-in-one’ battery rather than the smaller Growatt 6.5 kW model that was offered to me as a lower-cost alternative. The Givenergy is a premium lithium-ion battery with a 12-year guarantee and built-in EPS (see above).

The battery was installed in mid-March and so far everything has been working fine. I have an app I can use to monitor the battery condition and check the charge. In addition, I have remote monitoring from both the battery company and The Energy Box to ensure there are no issues. This service is provided free of charge.

Closing thoughts

If you’re considering getting a battery energy storage system, I hope this article will have given you food for thought. 

As mentioned earlier, the falling price of batteries (and lifting of VAT) combined with the rising price of electricity have undoubtedly made these devices a more attractive option in recent years. 

In addition, the growing likelihood of outages (in my opinion anyway) provides a strong additional incentive to secure a measure of independence from the grid. 

And finally, there are potential environmental benefits to installing a home storage battery, though that may or may not be a major consideration for you.

As always, if you have any comments about this article, please do leave them below.

Photo credits: Pexels

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Today I’m looking at solar PV (photovoltaic) panels. As you probably know, these panels generate electricity from sunlight. Growing numbers of homeowners (me included) have them on their roofs.

At one time solar PV panels came with generous payment tariffs known as FiTs (feed-in tariffs), but those days are long gone now. 

In this article I will be discussing what incentives exist today for installing panels and whether the sums still add up. I’ll also look at the other pros and cons of installing solar panels. 

The history

The UK has been at the forefront in promoting renewable energy, and solar power has been a key part of this.

The Feed-in Tariff (FiT), launched April 2010, paid home-owners an initially quite generous rate of around 46p per kWh (kiloWatt hour) of electricity their panels generated. This was known as the Generation Tariff. There were also additional Export Tariff payments of around 3p per kWh for surplus electricity exported back to the Grid.

FiT payments were soon reduced for new installations, though existing owners continued to receive the same rate for the duration of their contract (20 years in most cases or 25 years if your system was installed before 1st August 2012). The payments were also increased every year in line with inflation.

My late partner and I were fortunate to have our panels installed just before the rates were (first) cut. As a matter of interest, I now receive about £1,500 a year in tax-free FiT payments.

The FiT scheme was finally closed to new applicants on 31 March 2019, by which time the rate paid for new solar PV installations had been reduced to a paltry 4.01p per kWh.

New financial incentive

In January 2020 the Smart Export Guarantee (SEG) was introduced. 

The SEG is not a direct government subsidy. Instead, it requires all large energy suppliers with at least 150,000 customers to pay for renewable electricity exported to the grid by households. Unlike the FiT, with the SEG you don’t get paid anything for energy you use yourself.

Rates paid under the SEG vary considerably, from as little as 1p per kWh to 20p or more in a few cases (the highest rates tend to be variable).

The Energy Saving Trust estimates that a typical household in the middle of the country could make between £100 and £145 a year from the SEG, based on a rate of 5.5p per kWh (though, of course, the higher the rate paid, the more money you will make).

Other financial considerations

As you can see, the direct incentives to install solar panels have reduced considerably since the FiT scheme was introduced in 2010. It‘s not all bad news, though. 

For one thing, the price of solar panels has fallen steadily. When we purchased ours in 2011, we paid about £14,000. The Energy Saving Trust says that the price of a typical solar panel installation today is around £7,000, so half of what we paid.

In addition, the price of electricity has of course shot up, which means the savings you can make by generating your own have increased as well. 

The Energy Saving Trust estimates that at current prices (price cap to 31 March 2024) households could save on average £276 on their electricity bills. Add in the average £124 SEG payments and that makes £400 a year.

If your installation cost £7,000, that means it will take almost 18 years to pay off the cost of installation and be in profit. Of course, if electricity prices carry on rising, the pay-back period will be reduced.

On the other hand, any maintenance and cleaning costs (see below) will extend the pay-back period.

Additional benefits to solar panels

There are other benefits to installing solar PV besides the purely financial ones. 

One is energy independence: Solar panel owners enjoy a degree of independence from the Grid, which may be particularly valuable during power-cuts.

As the UK switches to an economy increasingly dependent on electricity, such events may well become more frequent. Of course, to get the full benefit from this you will also need home storage batteries (to be discussed in a future article).

Another consideration of great importance to some is the environmental benefit. Solar energy is a clean and renewable source, producing electricity without emitting any greenhouse gases. Solar panels can therefore be seen as contributing to the fight against pollution and climate change.

Though it must also be said that the manufacture of solar panels requires large amounts of water and other natural resources, causes greenhouse gas emissions and produces toxic waste. They are also difficult to recycle and may end up in landfill at the end of their useful life.

Other considerations

There are a few other things to take into account before getting solar panels.

Up-front costs – While the cost of panels has decreased, the initial investment can still be substantial. It’s important to carefully consider your budget and explore the financing options and any available grants or loans. Clearly if you have to borrow to install panels, any interest charges will reduce the financial benefits from them.

Roof orientation and space – The efficiency of solar panels depends on the orientation and angle of the roof. South-facing roofs with minimal shading provide optimal conditions for solar energy generation. If you don’t have such a roof all is not lost, however. My house faces east-west, so we had a ‘split array’ installed with half the panels on the east-facing side and half on the west-.

Your lifestyle and energy usage – The amount you save in practice will depend on how often you’re home, how much electricity you use, and when you use it. The Energy Saving Trust estimates that at current rates annual savings will amount to between £165 and £405, with an average of £276 (as stated above). 

Maintenance – Solar panels should not require any regular maintenance. The one exception is the inverter, which converts the DC power produced by the panels to the higher-voltage AC used in UK homes. This will likely have to be replaced at least once during the typical 25-year life of the panels at a cost of £500 to £1,500. 

Cleaning – It’s also important to ensure your panels are kept clean, as if they get dirty (e.g. from bird droppings, a problem where I live) their efficiency will be reduced. Personally I have my panels professionally cleaned every two to three years at a cost of around £150.

Decline in efficiency over time – Solar panels gradually decline in efficiency, a process known as degradation. This typically occurs at a rate of 0.5% to 1.0% a year; so after 25 years your panels will likely only generate about 80% of the power they did when first installed. There is nothing much you can do about this, though regular cleaning (as mentioned) will help maximize output.

Final thoughts

So is it still worth having solar panels installed? As you can see, it’s quite a complex question, with various considerations to take into account.

In purely financial terms, it’s likely to be at least 15 years before the costs are covered – so if you are planning to move in the next ten years or so, you might want to think carefully before proceeding.

On the other hand, if you have the money available and like the idea of cutting your energy bills and (possibly) helping save the planet, solar PV panels may be worth considering. And, as mentioned above, they will also give you a degree of energy independence. The latter may prove increasingly valuable according to how the government’s quest to achieve Net Zero plays out.

As always, if you have any comments about this article, please do leave them below.

Photo credits: Pexels

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Q. I’ve heard I might be paid if I use less energy or switch my washing to a Sunday. How can I sign up and how much could I earn?

A. You’re right, there is such a system and it’s the National Grid Electricity System Operator (ESO)’s Demand Flexibility Service (DFS).

It allows households and businesses to earn rewards for shifting their electricity use during set DFS events.

This means that the ESO can better balance the national grid at peak times over the winter, such as when people get home from work and start cooking their evening meal.

It started last winter, when more than 1.6m households and businesses took part in the ESO’s Demand Flexibility Service. This meant that energy suppliers saved over 3,300MWh of electricity, enough to power 10 million homes across Great Britain.

The ESO has confirmed that the DFS will run again this winter, and the first of 12 tests has recently taken place, with the rest running through to March 2024.

Those who sign up to take part in the free service, must opt-in to each event and reduce their energy use during a DFS event – usually lasting an hour. Those that do will be eligible to receive a reward offered by their provider, which is usually a small amount of money.

If you have a smart meter and your energy supplier is registered to take part in the DFS, they might have already contacted you to invite you to sign up.

You can see the full list of registered suppliers here. If your provider isn’t participating, there are some online providers and apps who can link directly to your smart meter data without contacting an energy supplier.

However, you can only take part with one DFS registered provider at a time. Households need to have a smart meter to take part, as well as provide marketing consent and access to your half hourly electricity metering data.

Abby is a policy and communication manager and focuses on developing Energy Saving Trust’s policy positions across the UK, with a specific focus on England. Abby works across many areas of energy policy, namely energy efficiency, decarbonisation of heat and consumer advice. This work involves shaping Energy Saving Trust’s positions and working with other stakeholders whilst engaging with government on crucial decarbonisation issues.

Abby also works closely with the communications team to create influential and impactful external communications on policy related issues.

Photo Credits: Pexels

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At long last, we’ve got a bit of good news to look forward to amidst this cost of living crisis!

Although, don’t set your expectations too high just yet as there won’t exactly be a huge reduction in energy bills.

But, at the very least we can expect to keep a little extra cash in our pockets come October!

So, how exactly did we come to have an energy crisis in the UK and where are analysts assuming we are going next?

What happened in the first place?

The prices of almost everything started getting out of hand during the pandemic due to supply chain issues, energy prices being one of the biggest culprits of all.

In 2020, as the UK was a net importer of energy, we didn’t produce enough energy resources at home to keep the country running. Therefore, we had to get some of our energy from elsewhere which left us at the disposal of price fluctuations due to circumstances in other countries (e.g. the Ukrainian war).

Ofgem, the UK energy’s regulator, sets energy price “caps” which determine the maximum amount energy providers can charge their customers for each unit of gas and electric. The word cap can be deceiving as it doesn’t mean there is a maximum amount your bill can go to.

If you use more energy than what is considered the “average” (what is average, anyway?) households energy use, you would have to pay more money. Same vice versa, if you use less energy than the average, you would pay less than the energy cap.

At the start of 2023, even though Ofgem set the energy price cap to £2,500 per year for the average energy-using household, the average energy bills were actually an eye-watering £4,279 per year!

Thankfully the government assisted households and businesses with these bills by putting in place the Energy Price Guarantee (EPG) and the Energy Bills Support Scheme (EBSS).

Where are our energy bills now?

Currently (as of September 2023), Ofgem have set the energy price cap at £2,074 per year, or roughly £173 per month.

Come October 2023, this will be changing for the better whereby the energy price cap will reduce to £1,923 per year, or approximately £160 per month. This is equivalent to an average reduction of 7% in energy bills per year¹.

What are analysts saying about the future?

The positive news is the latest reduction of the energy price cap is the third one in a row³.

This is certainly a sign that generally wholesale energy prices are going in the right direction. However, analysts do expect that these prices may creep up a bit in the months to follow, before settling again. According to Uswitch, the energy price cap may take the following trend:

• From a £1,923 price cap in October 2023
• An increase to £2,033 in January 2024
• A decrease to £1,964 in April 2024
• A further decrease to £1,917 in July 2024

Photo Credits: Pexels

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From peak levels of student debt to energy saving and retirement pension – here are our favourite must know money stories this week to help you get your head around your personal finances.

Student debt surpasses £200bn for first time

Outstanding student debt in England has surpassed £200bn for the first time, reports Richard Adams for The Guardian.

This figure has doubles in just six years, 20 years earlier than previous government forecasts, as the number of students at universities continues to outstrip expectations. Student loans crossed the £100bn mark in 2016-17 after the coalition government increased undergraduate tuition fees from £3,600 a year to £9,000 in 2012.

The Student Loan Company revealed that England graduates now owe an average debt just under £45,000, in contrast to students in Scotland, Wales and Northern Ireland who owe lower amounts.

More recent forecasts by the House of Commons library predict the total will reach £460bn by the mid-2040s.

With student finance already expected to be a battleground in next year’s election, Labour, if elected, has pledged to reverse changes made by the government accusing them of “hammering the next generation of nurses, teachers and social workers.”

Energy saving to return to prevent winter blackouts

Discount offers for households to use less electricity at peak times will return this winter as part of plans to minimise the risk of power cuts, reports Michael Race for BBC News.

National Grid ESO said it is taking steps to “minimise the potential impact to electricity customers” in the UK if supplies were to be disrupted again during the winter. While it is expected to have sufficient capacity to meet demand, it says it would be “prudent” to maintain the energy-saving scheme.

A typical property will have to pay £2,074 a year for gas and electricity from July, far above the £1,277 average bill in winter 2021.

National Grid ESO said the Ukraine war posed risks and uncertainties to gas supplies across Europe, and the “tight days” on the UK energy grid would most likely be in January. “There will be cold snaps in the winter and therefore we do expect to use our normal operational tools,” said a spokesman for National Grid ESO.

The amount of energy saved during the scheme last winter was enough to power almost 10 million homes, but the amount earned by each household is still to be known.

How much pension do I need for retirement?

As a general rule of thumb, people tend to retire on two-thirds of their annual salary, writes Nicole Garcia Merida for MoneyWeek.

While everyone might have a different ‘right’ amount for retirement – as per this rule, with an average salary of £33,000, the earner is placed between the Pensions and Lifetime Savings Association’s (PLSA) moderate and minimum categories.

A report by Now: Pensions and the Pensions Policy Institute found that ‘underpensioned’ groups, have private pension incomes 18-64% lower than the average UK person, reaching retirement with as low as £2,850. These groups primarily include single mothers, the self-employed, carers, people with disabilities, and ethnic minorities.

Merida looks at the below steps to plan your retirement better:

1. Sit down and crunch numbers
2. Boost your pension when you get a pay rise
3. Keep track of old pension pots
4. The longer you invest for, the more compound interest you will benefit from

You can save better for your retirement outside a pension by investing with ISAs, property and maintaining a long-term focused investment portfolio.

Photo credits: Pexels

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The cost-of-living crisis isn’t going anywhere soon, so it’s as important as ever to take better control of your finances. 

Here are some of our favourite stories this week to help you get your head around your money.

UK dodges recession, but economy remains smaller than pre-pandemic levels

Jack Barnett reports for City AM as the UK dodges recession, but predictions are  for the UK economy to remain around pre-pandemic levels until the end of 2024. The UK economy is set to shrink 0.3% in 2023, according to British Chamber of Commerce (BCC) forecasts.

BCC economists have scaled up their GDP forecasts massively from a 1.3% contraction this year. However, they cautioned that avoiding the recession is nothing to brag about, as Britain is the only economy in the G7 that is still below its pre-covid size.

UK growth is predicted to stay below 1% until 2025. Overall investment in the UK is predicted to contract more than 1%. With lower household spending and demand, businesses are likely to reduce staff, pushing the unemployment rate to a peak of nearly 5%.

The country is likely to tread through a long period of stagnation that will leave the economy smaller than before the Covid-19 crisis this year.

Homeowners looking to make their homes greener

Frans Ivens writes for This is Money as two thirds of homeowners look to modify their homes with energy efficient improvements, according to a study from Butterfield Mortgages.

The study found over half (54%) respondents are worried with their energy efficiency levels and would consider carrying out maintenance for their homes. To make their homes greener, some owners have already installed LED bulbs (66%), invested in double or triple glazing (57%), added loft or wall insulation (55%) or used a smart meter (46%).

Butterfield’s research found that only 40% homeowners are aware of their property’s current energy performance certificate (EPC) ratings.

17% said that they had considered remortgaging to fund energy-efficient upgrades, in an aim to bring their energy bills down, and improve their EPC ratings.

While the costs of such energy-efficient improvements are high, This is Money looks at other popular home improvement methods to compare their pricing and effectiveness.

Train ticket prices go up by 5.9%

Tom Espiner reports for the BBC as regulated rail fares in England and Wales rise by up to 5.9%.

The Government says that it did not want to add further pressure on households. Thus, while the rise is higher than the 4.8% hike last year, it is far below the rate of inflation.

The 5.9% rise is a “fair balance” between passengers and taxpayers, who help pay for trains, according to the Government. Train operators said that holding fares below inflation is ”‘understandable” as fares need to be set at an appropriate level for the rail industry and its customers.

An annual season ticket from Brighton to London Terminals has gone up from £5,304 to £5,616 (5.9%) whereas Huddersfield to Manchester is up from £2,908 to £3,076 (5.8%).

However, passengers complain that after months of poor services and strikes, they are not getting value for their money. The Office of Rail and Road said that train reliability was getting worse, with 4.5% of all planned trains between October to December 2022 were cancelled – the highest since records began in 2014.

Photo Credits: Unsplash

The post Must-know money: Dodging recession, greener homes and train prices appeared first on Mouthy Money.

The cost-of-living crisis isn’t going anywhere soon, so it’s as important as ever to take better control of your finances.  

Here are some of our favourite stories this week to help you get your head around your money. 

Four-day work week trial success 

Daniel Thomas and Emma Jacobs write for the Financial Times, as over nine in ten companies that adopted a four-day work week during a major trial in the UK, chose to maintain the flexible working arrangement after the trial ended.  

The 100:80:100 model – which follows a 100% pay, for 80% of the time, with 100% output – underwent a six-month trial in 2022. Companies of varying sizes across a range of sectors such as education, consultancy businesses, banking, IT, retail, and recruitment groups signed up for the trial.  

Of the 61 companies that participated, 18 want to permanently maintain the four-day working week, while 38 others are continuing the trial further. 

Revenues rose by a third on an average, and the staff turnover reduced significantly. Employees believed their work-life balance was better – with 40% of the 3,000 workers feeling less stressed and almost 75% had less burnout. 

Surging childcare costs force parents to cut down spending 

Michael Savage writes for The Guardian, as a survey finds 32% of parents of children under four in the UK have to cut down on essentials, such as groceries, as childcare costs rise.  

The UK is the third-most expensive country for childcare, according to the most recent OECD figures. Of the 1,000 parents surveyed, 63% would delay having, or would not have another child due to high childcare costs, and 70% would work more if childcare was free.  

However, parents are concerned as childcare reforms have been deprioritised by the Government, as it focuses its efforts on dealing with inflation, a possible recession and worker shortages, plus helping households with energy costs. 

The Government is currently considering cheaper solutions to manage the childcare system and bring costs down for parents.  

Falling energy bills may prompt the return of customer switching 

Domestic energy bills are set to rise in April. Kevin Peachey reports for BBC News, as predictions of subsequent falls might prompt competition and consumer switching to return. 

The current cap of £2,500 for an annual gas and electricity bill is set to rise to £3,280 in April. However, forecasts suggest soon this limit will be redundant as typical bills drop back to £2,153 in July and remain close to this level for the rest of 2023.  

Next month’s budget will witness any decision changes by the government to scrap plans to raise the EPG limit to £3,000. However, earlier this month, Chancellor Jeremy Hunt said that households were “unlikely to get extra support” from April.  

A sharp fall in wholesale energy prices in recent months is a signal the energy crisis is beginning to recede. Consumers could soon have a chance to take back control over their energy bills again, with a return of competitive tariffs allowing consumers to switch their energy providers.  

Photo credits: Unsplash

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