This winter will be one of the most financially challenging ever for those on low to moderate incomes – and the new chancellor sent a chill wind blowing through many households this week when he slashed the energy price freeze safety net by 75%.
The energy price guarantee that was going to run for two years will now be limited to only six months. After April 2023, help will be targeted at those most in need of support, Jeremy Hunt said.
The price guarantee was designed to freeze energy bills at an average of £2,500 a year – although remember that that is still virtually double last winter’s Ofgem price cap.
The £400 energy bills support scheme that kicked off this month will provide some relief but amid rising food prices and soaring housing costs, the choice for some will be to heat or eat.
So how can you plan your life to avoid an energy price shock in the months ahead? What are some of the things you can do to cut your bills? For those close to the breadline, where can you go to stay warm?
Return to the office, or go in more
View image in fullscreenAn employee takes a break from work at his office. Photograph: PeskyMonkey/Getty Images
Office workers who are still able to work from home after the coronavirus pandemic may be reluctantly wondering if going back in – or going in more – will at least save on the heating bills. But does it add up financially?
What you will save
The average capped bill is £2,500 for the year, and if gas makes up around half, that’s £1,250. Half of that is spent in the three coldest months in winter when the heating is on most, meaning the spend is a little over £200 a month, or around £7 a day. Obviously this depends on the size of the home and boiler installed, and insulation variables.
If you switch the heating off and head into the office, that suggests a saving could be £150 a month or more in winter for some people. Of course, much will depend on how you heat your home. If during the day you only heat a small home office, with radiators turned off around the rest of the house, the savings from heading into the office will be considerably less. Plus, you will still need to heat your home first thing in the morning and later in the evening.
With going into the office, there’s also the gain from not using electricity while working from home to be factored in.
A desktop computer is a relatively spartan user of electricity but according to the calculator on Citizens Advice’s website, it will still set you back 54p a day, or about £2.70 a week, assuming you are running it eight hours a day.
If you put the oven on for half an hour at lunch, that will add a further 36p a day, or £1.80 a week, while the kettle will be close to £1 a week.
Drawbacks
For many, commuting costs are the single biggest financial deterrent to returning to the office.
If you live in, say, Brighton and commute to London, a monthly season ticket is £430, or far more than any saving you might make on energy bills.
Then there are the incidentals that add to office life: a coffee for £2.50, maybe lunch for a fiver.
Going back to the office to save on energy bills only really makes sense if your family setup enables you to turn off the heating, your commute is cheap, and you are disciplined about bringing in your lunch and walking straight past Pret with a saintly water bottle from home.
Find a welcoming warm space outside your home
View image in fullscreenLibraries and museums are preparing to host more visitors during the winter months. Photograph: Brian A Jackson/Getty Images/iStockphoto
Thousands of voluntary organisations, charities and local authorities in Britain are coming together to organise warm spaces this winter for people priced out of heating their homes.
In a (literally) heartwarming initiative, spaces are currently being registered on the Warm Welcome Campaign website. The idea is that people will be able to search the site for somewhere that is “free, warm, welcoming and safe” in an ambitious project backed by the former prime minister Gordon Brown.
The campaign is being led by a coalition of churches. Many local authorities are also setting up searchable directories of places to stay warm, with Gateshead council’s Warm Spaces initiative leading the way. Dozens of locations across the local authority area have already pledged to open up warm spaces.
The types of spaces on offer vary enormously. “We have bowling clubs, cricket clubs – we just had an inquiry from a rugby club this morning – local libraries, cancer services, a lot of faith groups and community halls. The minimum we ask is that they sign up to our charter to provide a space that will of course be warm, where they’ll provide a warm welcome and a free hot drink,” says Alison Dunn, the project leader for the council.
Some spaces will have activities available such as free film nights. Others plan to do their best to make their spaces look like a living room, with sofas and soft furnishings. Others will be set up for home workers to go to, with good wifi and free charging points.
Dunn says she is fielding calls and inquiries from dozens of other councils around the country hoping to reproduce Gateshead’s scheme.
Libraries and museums are also gearing up for an influx of users seeking warmth. Isobel Hunter of Libraries Connected says: “Libraries have been thinking about how we put a warm wrapper around everything we do. Because we are open for much longer hours than many other organisations, we can be an important part of the local jigsaw.”
What you’ll save
The warm spaces will be free to enter and will typically provide free hot drinks. Even if you only spend two hours there when you would have had the heating on back home, the saving is likely to be at least a few pounds every visit.
Drawbacks
The majority of warm spaces are likely to be daytime only, with fewer opening their doors in the evenings, when the need for heating is arguably most intense. Individuals who live in rural areas will find it more challenging to access these spaces. Sadly, many local libraries have shut, while museums are mostly in larger towns and cities. If you are not a senior citizen, you may have to pay for a bus or train. But the providers of warm spaces say they are aware of these issues and are urgently seeking ways to resolve them.
Go on a long-stay winter sun holiday
View image in fullscreenA tourist swims in a pool at a hotel in Tunisia. Photograph: Anis Mili/AFP/Getty Images
Don’t fancy shivering in a half-heated home in Britain? Tui, the UK’s biggest travel group, says it is seeing strong demand for long winter breaks in the sun, with bookings for four-week stays on the rise.
A Tui spokesperson says: “Twenty-one and 28-night holiday sales for this winter both look more popular this year in comparison with winter 2019. There is also increased demand for longer durations in long-haul areas and also Egypt and Cape Verde.”
In Canada they are called the “snowbirds” – the pensioners who flock south to Florida to avoid the harsh local winter. But can it really make financial sense for Britons to do the same?
What is surprising is just how cheap it can be to take a month’s break.
Take, for example, one of the deals offered at the time of writing by Tui. It’s only £795 a person for a 28-day stay at the four-star Phenicia Hotel in Tunisia, breakfast, evening meal and flights from the UK included, going out 13 January and returning 10 February. So that’s £1,600 for a couple, with most of their food included.
What you will save
Typically, well over half of your gas bill is from heating your home in the three coldest months of the year. If you have a large-ish home, you could save £200 a month on heating bills by going abroad.
Then there’s the electricity saving as well: a typical UK home uses about 242kWh of electricity a month, costing just over £82 a month at the current 34p a kWh capped price.
The Tui deal includes breakfast and dinner, so savings on food purchasing and cooking can also be factored in.
Drawbacks
This is not really a money-saving measure but the savings from this year’s extortionate heating bills will at least partly offset the cost of spending the winter in the sun. It will also inevitably involve flying, adding to the climate crisis.
If there is extremely cold weather while you are away, your pipes could freeze, so you should keep the heating above 10C, say the experts. You will also have to continue paying the standing charge on your energy bill while you are away – and, controversially, these have risen markedly over the past year.
Become a digital nomad
View image in fullscreenIs temporarily working from abroad something you would be able to consider? Photograph: ArtistGNDphotography/Getty Images
Winter sun is fine for the retired. But what if you are working? If your employer is still relaxed about you working from home, there is arguably little to stop you heading abroad for the worst of the winter. There’s one big caveat: since Brexit, UK citizens can only spend 90 days in any 180 days in the EU Schengen area countries.
Spain plans to issue “digital nomad” visas giving Britons the chance to work in the sun for up to five years, paying as little as 15% tax on their earnings.
What you will save
If you are renting in a high-price location in the UK, such as London, Bristol or Brighton, then heading south will save on housing costs as much as heating bills. For example, in Cádiz in Spain, you can rent medium-term apartments in the area on Rentalia from about £700 a month in winter, some of which have utilities included and come with good wifi. Airbnb is, of course, another option.
Drawbacks
This obviously won’t work if your office expects you in one or two days a week. There are tax implications if you receive income from one territory but live in another (usually you become tax-resident after 183 days over a calendar year). Plus, living alone in an apartment block in an off-season cheap Spanish resort may lose its appeal after a while.
Spend the afternoon in the cinema
View image in fullscreenHave you checked out your local cinema to see if it offers cheap deals? Photograph: izusek/Getty Images
There are some cheap deals around. For example, the Odeon cinema chain has the Silvers scheme for older people where seats start at £3.50 and include tea, coffee and biscuits, served before the film. Similarly, the Picturehouse chain has the Silver Screen club for the over-60s offering discounted tickets and free tea and coffee.
What you will save
Like a visit to a library or museum, the saving on gas and electricity is unlikely to be more than a few quid. But if going to the cinema gets you out of the house and watching a movie for only a few pence more than staying at home, it is probably worth it.
Drawbacks
These deals are usually for off-peak times only – you typically can’t use them on cold evenings.
Shower at the office or gym
Many large offices have showers, usually for the relief of sweaty cyclists commuting to work.
What you will save
It’s said that people typically spend around eight minutes in the shower, at an estimated cost of about 25p-30p.
Drawbacks
The grottiness of some workplace facilities: damp and smelly towels squashed on to the sole radiator; other people’s body hair lining the shower basin; one sink to shave in. It will be a return to the worst of your student days.
Save more sensibly by cutting your home showering to perhaps just two or three minutes. Some households are already using a shower timer to help keep themselves in check.
This article was amended on 27 October 2022. In a previous version, figures for the potential savings of working in an office and going on a winter holiday were based on cost calculations of running a boiler for five daytime hours each day. These calculations were likely to overestimate energy use and have been replaced by example figures based on the current average UK energy bill of £2,500.
