Millions of UK Households Can Cut £400 Off Energy Bills With Two Simple Changes

Millions of households across the UK are struggling with rising energy costs.

However, experts say families can cut more than £400 annually with just two quick adjustments.

By fixing energy tariffs before the next Ofgem price cap announcement and by switching payment methods from standard credit to direct debit, customers could unlock major savings.

How to Save on Energy Bills

Fix Your Tariff Before the Next Price Cap

The Ofgem energy price cap plays a major role in household bills.

Currently, the price cap sets the average household bill at £1,720 per year (for those paying by direct debit) between July 1 and September 30.

With the next price cap announcement expected this week, households have a limited window to act. Fixing tariffs now could save the average family £271 per year before new rates take effect on October 1.

Change Payment Method to Direct Debit

Another easy way to save is to stop paying by standard credit, often known as “Pay on Receipt of Bill.” This method usually involves paying quarterly after receiving a bill.

Switching to direct debit instead could instantly save families £135 each year. Together with tariff savings, households could cut costs by £406 annually.

Why Payment Methods Matter

According to the Department for Energy Security and Net Zero, around 3.4 million households (12%) still pay by standard credit.

Because the price cap for standard credit is set higher at £1,855 per year, these families pay £135 more than those using direct debit.

For pensioners or older adults who often prefer this method, the cost difference can be severe.

In some cases, paying by receipt of bill could eat up 69% of the Winter Fuel Payment, leaving less money for heating in the coldest months.

Expert Advice on Energy Savings

Experts from MoneySuperMarket Energy stress the importance of making changes now before energy use spikes during winter.

Energy specialist Laura Hinton explains:

• Switching providers can save £271 per year on average.
• Choosing direct debit instead of cash, cheque, or bank transfer payments can add another £135 in savings.
• Many of the best energy deals require direct debit as a condition.

She also highlights that switching providers is “quick and easy” for most customers.

Families are encouraged to review their bills, check market offers, and ensure older relatives are not overpaying.

Total Savings for UK Households

When both steps are combined, UK households could save £406 per year. On a national scale, those who continue to use standard credit may be paying up to £459 million more each year compared with direct debit customers.

Saving Method	Potential Savings	Annual Bill After Change
Fixing tariff before price cap	£271	Lower average bill depending on deal
Switching from standard credit to direct debit	£135	£1,720 instead of £1,855
Total possible annual savings	£406	Significant reduction in household costs

Cost of Living and the Energy Crisis

The UK’s ongoing cost of living crisis has made energy bills a top concern for households.

With winter approaching and bills expected to rise again, experts urge families not to wait until the October price cap takes effect.

Acting now could mean hundreds of pounds in savings before colder months increase usage.

In today’s challenging financial climate, making smart changes to how you manage your energy bills can provide crucial relief.

By fixing your tariff before the next Ofgem announcement and switching payment methods to direct debit, households can cut over £400 each year.

These simple but powerful steps are particularly important for vulnerable groups like pensioners, who risk losing a significant portion of their Winter Fuel Payments if they stick with costlier options.

With energy competition increasing, now is the best time to act and secure a better deal before winter arrives.

Frequently Asked Questions