How to Reduce Energy Bills in 2025

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November 3rd, 2025
How to Reduce Energy Bills in 2025

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Why Are Energy Bills Still High in 2025?

Despite the gradual drop in wholesale prices, energy bills in 2025 remain above pre-crisis levels. The average dual fuel household pays about £1,720 per year, while high-use homes face costs up to £2,427, according to Ofgem’s July 2025 energy price cap.

Even with market stabilisation, energy consumption in the average home is higher than in 2020 due to increased home working and electric heating adoption. The good news: households can still make a big difference with targeted energy efficiency measures and smart tariff choices.

What Small Changes Save the Most Energy in 2025?

Reducing your bills doesn’t always require major investment. Several small changes can deliver meaningful energy savings for the average home.

Change Potential Annual Saving Why It Works
Lower thermostat by 1°C £70–£100 Less gas use and reduced heating bill
Turn appliances off standby £30–£50 Avoids constant background energy usage
Wash clothes at 30°C, full load £20–£30 Lower water temperature and fewer cycles
Fit LED light bulbs £4–£10 per bulb Use 75–80% less energy than halogens
Four-minute showers £40–£60 Reduce amount of hot water and heating energy
Draught-proof windows/doors £45–£60 Prevent cold air and home heat loss

Check your potential savings with the energy bill calculator

How Can Smart Home Technology Help Lower Energy Bills?

Are Smart Thermostats Worth It?

Yes — smart thermostats and smart heating controls are among the most effective upgrades in 2025. According to the Energy Saving Trust, they can cut heating costs by £75–£150 per year by allowing precise control over heating systems, empty rooms, and time scheduling.

Smart thermostats also monitor energy usage trends and prevent unnecessary heating when you’re away. Some systems integrate with smart meters to track real-time costs and suggest adjustments.

Smart Plugs, Lighting, and Heating Controls

  • Smart plugs let you shut off appliances remotely to prevent standby energy consumption.
  • Smart lighting with sensors ensures lights only run when needed.
  • Smart heating controls allow zonal management — heating only occupied areas.

These technologies make a big difference in lowering the amount of heat wasted and boosting your home’s energy efficiency.

How Does Insulation Reduce Heat Loss?

Insulation is one of the most powerful long-term ways to cut energy consumption. Around one-third of heat loss in uninsulated homes escapes through walls, and a quarter through the roof.

Common Types of Insulation and Savings (2025)

Type of Insulation Average Installation Cost Potential Annual Saving Notes
Loft insulation (270mm) £500–£800 £180 Stops rising heat loss through roof
Cavity wall insulation £800–£1,000 £150 Ideal for pre-1990s homes
Floor insulation £350–£700 £60 Prevents cold drafts from below
Secondary glazing £250–£500 £50 Reduces cold air and condensation

Many local council areas support upgrades through the Energy Company Obligation (ECO4) or Affordable Warmth Scheme, targeting social housing and low-income households.

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How Can Heating System Adjustments Save Money?

Boiler Efficiency and Flow Temperature

Most UK homes still rely on gas boilers or combi boilers. Lowering your flow temperature from 75°C to 60°C can save up to £100 per year, according to the Heating Hub.

Regular servicing also maintains boiler efficiency, helping your system use less energy to produce the same amount of heat.

If your boiler is more than 12 years old, consider upgrading to an A-rated condensing model or an air source heat pump for improved efficiency and lower carbon emissions.

Heating System Average Efficiency Annual Running Cost (2025) Notes
Older gas boiler (pre-2005) 70% £1,800 Wastes more gas
Modern condensing boiler 90–94% £1,450 Meets new EPC targets
Air source heat pump 300%+ (COP) £1,200 Uses electricity, lower emissions

Can You Save Money on Hot Water Usage?

Heating hot water is the second-biggest energy expense in most homes after space heating.

  • Fit a hot water cylinder jacket — saves about £50 per year.
  • Install a water meter — pay only for what you use, encouraging less water usage.
  • Reduce shower time to four minutes — saves both water and energy.
  • Turn down your hot tap temperature — most homes set it higher than needed.
  • Use a combi boiler or efficient hot water tank for on-demand supply.

The amount of water you heat directly impacts your energy bill. For older homes, insulating a hot water cylinder and nearby pipes (pipe lagging) can be a great way to preserve heat.

What Are the Best Low-Cost Home Improvements for 2025?

Some of the best savings come from simple home improvements you can do yourself using items from hardware stores.

Upgrade Estimated Cost Typical Saving Description
Radiator reflector panels £25–£30 £20–£30 Reflect heat back into the room
Door seals and draught excluders £10–£20 £30–£45 Block cold air from gaps
Hot water pipe insulation £15 £10–£20 Keeps water hot longer
Thick curtains or blinds £30–£80 £20–£40 Cut home heat loss from windows
LED lighting kit £25 £40 Uses far less energy

These affordable steps can raise your Energy Performance Certificate (EPC) rating and qualify for future energy efficiency grants.

How Can Smart Meters and Displays Help Track Energy Use?

Smart meters are now installed in over 60% of UK homes, including those in Northern Ireland. They record energy use every half hour, showing how much gas or electricity you consume in real time.

When linked to an in-home display, they help identify high-cost appliances — for example, a tumble dryer, washing machine, or electric shower.
Many households using smart displays report a 5–10% drop in energy consumption due to greater awareness.

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How Can Smart Meters and Displays Help Track Energy Use

How Can Renewable Energy Help Yo Cut Long-Term Costs?

Investing in solar panels or an air source heat pump can reduce reliance on grid energy and lower carbon footprint.

  • A typical 4 kW solar panel system generates around 3,800 kWh/year, saving about £500 annually under 2025 tariffs.
  • Air source heat pumps provide three units of heat for every unit of electricity, ideal for homes with good insulation.
  • Combined with a smart thermostat, these systems optimise energy use for long-term savings.

Some local councils provide low-interest loans or grants for renewable installations under the Home Upgrade Grant (HUG) and ECO4 schemes.

How Does Cooking Habits Impact Energy Use?

Cooking is often overlooked but contributes to rising bills.
Simple adjustments make a big difference:

  • Use the right size pan for each hob.
  • Keep lids on pots to retain amount of heat.
  • Cook multiple meals at once to reduce oven time.
  • Use microwaves or air fryers instead of ovens when possible.

According to the Energy Saving Trust, batch cooking can save £30–£50 a year, especially for electric hob users.

What Help Is Available for Low-Income Households?

Households struggling to pay their heating bills can access support through:

  • Warm Home Discount: £150 credit for eligible customers.
  • Affordable Warmth Scheme: Home upgrades for those on certain benefits.
  • Energy Company Obligation (ECO4): Provides free insulation and boiler upgrades in low-efficiency homes.
  • Local council initiatives and water company rebates for those with high water usage.

These programmes are vital in reducing fuel poverty and improving home heat loss performance for vulnerable households.

Check what support you qualify for using the energy bill calculator

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How to Switch and Save on Energy Bills

Cutting your energy costs in 2025 can be done in just a few clear steps:

Step 1: Start with the energy bill calculator to check your current usage, annual spend, and how much you could save by switching tariffs.

Step 2: Review your energy habits — note peak times, appliance use, and heating patterns — so you can choose a tariff that matches your lifestyle.

Step 3: Compare energy prices and shortlist suppliers offering the best value, whether that’s a fixed or flexible deal.

Step 4: Confirm your switch — your new supplier will handle the transfer seamlessly while you continue receiving uninterrupted gas and electricity.

FAQs About Reducing Energy Bills in 2025

What is the quickest way to reduce energy bills?

Lowering your thermostat by 1°C and turning off standby appliances are the fastest and most reliable savings methods.

How can insulation help reduce heating costs?

It prevents heat loss through walls, roofs, and floors — saving around £100–£300 per year, depending on your home type.

Are smart meters really useful?

Yes. Smart meters show real-time data and help you spot unnecessary energy usage, often cutting consumption by 5–10%.

Does a shorter shower really save money?

Yes. Reducing shower time to four minutes can save about £40–£60 annually in hot water and energy costs.

Should I replace my gas boiler?

If it’s over 12 years old, a new condensing gas boiler can improve boiler efficiency by up to 20% and lower your heating bill.

Do energy efficient appliances make a difference?

Yes. New A-rated washing machines, fridges, and tumble dryers use 40–60% less energy than older models.

What type of insulation gives the best return?

Loft insulation offers the highest savings-to-cost ratio for most UK homes.

Can solar panels really cut my energy bill?

Yes. A typical system can save up to £500 per year and lower carbon emissions significantly.

What is the Energy Company Obligation?

A government-backed scheme requiring suppliers to improve home’s energy efficiency for low-income households.

What is an Energy Performance Certificate (EPC)?

An EPC rates your home’s energy performance from A to G — improving insulation and heating systems can raise your rating.

How much water does the average home use daily?

About 142 litres per person — reducing amount of water heated saves on both water and energy bills.

Can Northern Ireland residents access similar schemes?

Yes. Northern Ireland runs its own Affordable Warmth Scheme to support home improvements for eligible households.

Are there specific winter tips to keep energy bills low?

Yes. Close curtains before sunset, seal draughts, bleed radiators, and use smart heating controls to maintain comfort at a lower temperature. Setting thermostats to 18–19°C can save £70–£100 a year.

Is there a checklist I can follow to ensure I’m getting the lowest possible energy bills?

Yes. Check your boiler efficiency, insulate your loft and pipes, run appliances on full load, shorten shower time, switch to LED bulbs, and regularly use the energy bill calculator to track your savings.

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Correct as of 28 October 2025

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