How to cut heating bills and stay warm

Changing energy supplier may help a bit but insulation is still the best way to save money, says Nick Clayton

This month sees a huge rise in the cost of energy for millions of UK consumers. British Gas has increased the cost of gas by 12.4 per cent and the price of electricity by 9.4 per cent. And this is just the beginning of a long-term increase in the cost of fuel.

This month sees a huge rise in the cost of energy for millions of UK consumers. British Gas has increased the cost of gas by 12.4 per cent and the price of electricity by 9.4 per cent. And this is just the beginning of a long-term increase in the cost of fuel.

While some of the current rise can be put down to war and political instability, the underlying reasons run much deeper. For decades, thanks to North Sea oil and gas, Britain has been a net exporter of energy. Now those stocks are becoming depleted and the country now has to import the majority of its fuel and pay the world market price for it.

If there is some good news, it is that almost every household in the country can carry out simple measures that will more than offset the percentage rises in their bills. As we reluctantly switch on our central heating for the winter, there really is no time like the present to make those improvements. The current government estimate is that every home wastes about £200-worth of energy a year. In comparison, those British Gas increases will add about £70 annually to the bills of its 6.2 million electricity and 18.4 million gas consumers.

"Our message to British Gas customers is to shop around and get yourself a better deal," said the industry regulator, Ofgem, when the increases were first announced. The process of changing supplier is now relatively straightforward.

The best place to start is on the internet where there is a number of comparison websites ( see panel) that automate the process of shopping around for the cheapest supplier. Ideally, you should have bills going back over a year in order to best estimate your potential savings. Once a new supplier has been identified, most of the procedures required to change can generally be carried out online. A family of four could save up to almost £200 a year on their bills.

Moving to a new energy supplier is, however, likely to be just a short-term economy. All gas and electricity companies face rising wholesale prices and it is just a matter of time before they are passed on to their customers. The real savings in home-energy costs require some cash outlay; on the other hand, they generally pay for themselves within two or three years at most. And they often attract grant aid as well. They could also add value to your property.

Top of the list is cavity-wall insulation which, for some reason, is regarded as somehow old-fashioned. In fact, it remains an extremely good way of saving money. It is not suitable for all properties, but if you live in a house that was built between the 1930s and 1980s, it can save about a quarter of your fuel bill. For an average family, that represents a reduction of about £100 a year. As it costs about £300, cavity-wall insulation should pay for itself in about three years.

The way it works is that insulating material is put into the cavity between the inner and outer wall of the house, which is otherwise responsible for about a third of heat loss. It is a clean and simple process that takes about three hours. Make sure it is carried out by a Cavity Wall Insulation Guarantee Agency (CIGA) installer. Grants may be available.

The other main area for heat loss is through the roof. Loft insulation can save another average £100 a year and as it only costs about £200, the payback period is even quicker, about two years. Actually, it is not that difficult a job and you can probably do it yourself and save even more. If you already have loft insulation make sure it is at least 250mm thick as anything less is not fully efficient.

An even quicker, if less spectacular, return on investment can be made from fitting an insulating jacket to your hot water tank. Make sure it is at least 76mm thick. It will only cost a few pounds, but it should save an average of £15 a year.

Another DIY job that can cut heating costs is floor insulation. For a cost of about £100 it will save up to £30 a year. At the same time it is worth fitting draught excluders round doors, letterboxes and anywhere else that lets the wind in and the heat out.

About 20 per cent of heat is lost through a house's windows. Double glazing obviously makes sense, but choosing which sort can be quite complicated. On purely cost grounds, secondary glazing often makes most sense. It is relatively simple to fit for anybody who is fairly competent at DIY and its insulation qualities are little worse than full double glazing. The main downside is that it generally makes windows more difficult to open.

If the windows in a house need to be replaced anyway, it makes sense to have double glazing fitted. As with any job of this type you should ensure that you get three quotes and also that the material chosen fits in with your neighbourhood. Incidentally, people who do not have double glazing, perhaps because they live in a conservation area where its use is not allowed, can prevent a substantial amount of heat loss simply by ensuring that their curtains are closed at dusk.

That is one of a number of measures that can be taken to cut bills without making physical changes to a home. Turning down the heating by just one degree centigrade, for instance, can reduce bills by up to 10 per cent. Wearing more clothes indoors will definitely keep you warmer, although you do not have to go as far as following former Tory minister Edwina Currie's advice and wear thermals and a woolly hat in bed.

Stopping heat escaping is one thing; creating that heat efficiently is another. Boilers do not attract the same quantity of advertising as appliances such as fridges, cookers and washing machines, but they are just as important and have been the subject of major technological advances in recent years.

Old boilers tend to be good at heating up the flue - which is not much use to anybody. High-efficiency gas- or oil-powered condensing boilers now recycle that heat and cut back on the waste. Replacing a 15-year-old boiler could cut fuel bills by up to a third. And condensing boilers are no larger, more expensive or difficult to fit than conventional ones.

Ask your registered installer (Corgi for gas-fired boilers, Oftec for oil-fired boilers) for one. There is an ever-increasing range available, from a variety of different manufacturers and at varying costs. It is also worth visiting the comprehensive online database at Look for the boilers that carry the Energy Efficiency Recommended logo.

Improved controls for a central heating system, such as room thermostats and heat-control valves on radiators will set a householder back upwards of £125. In a larger house this could save up to £75 a year, but although the amounts in smaller properties are likely to be rather less, the controls should still pay for themselves in less than five years. There are other ways to cut fuel bills, such as solar power. At the moment these tend to give the environmentally conscious people who have them fitted, a warm glow inside rather than a substantial saving on their bills. A typical domestic solar-energy system, capable of supplying about one-third of a household's energy needs, costs about £10,000 to buy and install. There are, however, government grants covering up to 50 per cent of the cost. But it is still an expensive way to save energy even though maintenance costs are relatively low.

Solar water-heating systems are cheaper. The cost of installation is about £2,500 to £4,000 for one that will provide about half the hot water for a household over a year. It is possible to do it yourself for about £500 to £1,500, but fitting does require skill and time. Again, maintenance costs are low. Any system relying on the sun for power needs to face south or south-west and be mostly out of the shade. Generally, these systems are fitted on the roof. One important thing to note is that they often require planning permission. Check before you fit.

No one will have the time or money to carry out all the possible energy-saving measures in their home. But, unlike most investments, at least they do have a guaranteed return.

'I swapped an oil tank for solar panels'

When he retired two years ago, David Sowden moved with his wife from Leeds to the village of Crosby-on-Eden near Carlisle. "It's a detached ex-Ministry of Health house that was built for the local nurse in 1955," he explains.

He was in the process of totally revamping the house when he ran into difficulties. A previous occupant had removed a lintel, leaving an old boiler as a support. The builder who helped him out with that problem also told that he could get a grant for insulation.

"I got cavity wall insulation and the loft insulation brought up to spec. It cost me £146," he says.

"There's no mains gas in the village so I have to rely on an old oil tank for heating. As a result I was asked if I'd be interested in solar panels."

These would have cost around £1,100, but as this was a pilot project he ended up paying £650 for the panels, which help supply his hot water. "I filled up with oil last October," he says. "I checked it three or four days ago and I reckon I'm about 250 gallons up."

With domestic heating oil costing around 27p a litre that represents a saving of around £300 over almost a year from his total investment of £800.


One spin-off from government concern about global warming is the number of places giving impartial advice on energy saving. Although these focus on reducing CO2 emissions, they also offer ways of saving money.

* For people who would rather deal with somebody face-to-face there are 52 Energy Efficiency Advice centres around the UK. For details call 0800 512 012.

* The Government's Energy Saving Trust website is filled with useful tips. It even has an interactive grant finder to see if you can get help with insulation.

* The boiler efficiency database includes recommendations for size of boiler according to property.

* THe Cavity Insulation Guarantee Agency provides independent 25-year guarantees for cavity wall insulation.

* The Glass and Glazing Federation (GGF) is the trade association for double glazing companies.

* Corgi is the national watchdog for gas safety.

* Oil Fired Technicians Association is the trade body covering oil-fired central heating.

* There are a number of websites that will recommend gas and electricity suppliers on the basis of your energy consumption and where you live.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

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