Beat the secret energy tax

By 2020, we could all be paying £176 a year in energy taxes - here's how to fight back.

Many of us are probably delighted now that the warmer weather is here. After all, that means the heating can be securely switched off and our energy bills can start to come down – very much-needed following a tough winter.

Let’s face it, energy bills can work out to be very expensive. Even if we work hard to keep our energy usage to a minimum, it can still take a large chunk out of our bank accounts. And unfortunately, it’s not just the energy we’re using that we’re paying for.

Recent research has revealed that households are paying £84 a year in hidden taxes on their energy bills to meet the cost of combating climate change.

These environmental taxes go towards the EU Emissions Trading Scheme, Carbon Emissions Reduction Target, Community Energy Saving Programme and the Renewables Obligation. What’s more, those taxes could more than double to £176 a year over the next ten years! Ouch!

And it doesn't end there. According to Ernst & Young, investment in Britain's energy supplies will cost over £230 billion, which could potentially add £548 onto household energy bills over the next 15 years. And while much of this will simply be paid for through higher energy bills, it's likely to also have an impact on how much energy tax we pay. Eek!

The good news

So that’s the bad news over and done with. But is there any good news? Well, in a nutshell, yes. No one likes to hear that their energy bills are likely to increase. But on the positive side, energy suppliers have until 1 December this year to provide all customers with a brand new annual energy statement.

The great thing about these annual statements is that they must provide details about your current energy plan, including the name of the tariff, yearly consumption and how much you are likely to have to pay for your energy over the next year – based on your current consumption and current prices.

They should also state any discounts that are available on your tariff, or might be available if you switch to another tariff. And finally, they should also contain a reminder that you can switch supplier and provide advice on how to do so.

It’s hoped that these statements will enable people to manage their energy costs better and encourage them to switch tariffs more often.

Cut the costs

Although these new measures are a step in the right direction, if the thought of paying even more for your energy bills worries you, there is more that you, yourself, can do to lower your energy bills. So to give you a helping hand, here are some of my top tips.

Related how-to guide

Lower your household bills

How to cut your insurance, phone, broadband, water and TV bills, and save thousands of pounds a year!

See the guide

Switch!

If you haven’t switched energy suppliers for a while, or even if you have, it's well worth taking a look at the lovemoney.com electricity and gas comparison tool to see whether there’s a cheaper tariff out there for you. It takes around three minutes to get a quote and could save you more than £700 a year!

It’s also worth investigating online tariffs as these are likely to work out cheaper than those that aren’t. Similarly, it’s worth paying by direct debit as this should also help to bring down the costs. And don’t forget to check whether paying for dual fuel – using the same supplier for your gas and electricity – works out even cheaper!

Always check your bills

When you receive your bill, always make sure you check the meter to ensure your bill is correct. You may find that your bill is just an estimated reading so it’s really important that you check your meter and take an accurate reading yourself – otherwise you may be paying too much. It may feel like a bit of a hassle, but it won’t take long and if it saves you money, it’s well worth doing.

Once you’ve submitted your reading to your supplier, your bill should be recalculated and re-issued.

Sort out your insulation

A great way to keep your energy costs down is to make sure less of it escapes from your home! And the best way to do that is to get insulated!

The Energy Saving Trust reckons you could save around £150 a year with loft insulation, while cavity wall insulation could save you around £115 a year.

If you're worried about how you will be able to pay for this insulation, it's a good idea to check whether you are eligible for a government or local authority grant. If you’re over 70, you can have your home insulated for free, and if you’re over 60, there’s also a good chance of getting financial help. Even if you don’t fall into these age categories, you may still be entitled to some form of grant, so check to see whether you are eligible.

Similarly, it's a good idea to ensure you have double glazing. This could save you around £135 a year on your heating bills.

Claim benefits

If you’re over 60, you may be entitled to a Winter Fuel Payment to help cover your heating costs. And if you’re struggling financially, all energy providers must offer social tariffs to help their most vulnerable customers.

All social tariffs must be equal to the supplier’s cheapest deals. You can find out more about what’s on offer here.

Get a more efficient boiler

Unfortunately, the government’s Boiler Scrappage Scheme has now come to an end. However, if your boiler is ancient, it really could be worth investing in a new, more efficient model. Figures from the Energy Saving Trust show that annual energy bill for the average detached home is £235 cheaper with an A-grade boiler.

Final tips

Finally, here are a few extra energy saving tips for you to follow!

• Bleed your radiators
• Defrost your freezer on a regular basis
• Vacuum the dust off your refrigerator coils
• Turn off the hob or oven several minutes before food is cooked
• Match the saucepan size to the hob ring
• Turn off appliances rather than leaving them on standby
• Turn your thermostat down
• Close your curtains at dusk to stop heat escaping through windows and check for draughts
• Turn the lights off when you leave a room
• Always fill up your washing machine and dishwasher
• Only boil as much water in your kettle as you need
• Use energy saving light bulbs
• Check the brightness setting on your TV is suitable for your room. The brighter the TV set, the more energy it uses
• Turn off radiators in unused rooms
• Don’t leave your mobile charging all night
• Line-dry clothes whenever possible to avoid using the tumble dryer
• Hang or fold clothes up straight away after drying them so they will need less ironing.

There are even more tips on the Energy Saving Trust website, so there's absolutely no excuse to pay more for your electricity and gas than you need to!

More: Drivers: Cut the cost of your MOT | Slash your bills by £200 in seconds