Can you afford not to go green? Energy costs to rise by £30 per month in the next decade

UK homeowners believe they are spending £350 a year*, or £29 per month, more on heating and power compared to a decade ago, according to AXA.

11 October 2018

Posted in Product

  • Homeowners say they are paying £29 more a month on utility bills today compared to 10 years ago, and expect this to rise by another £31 in the next decade
  • Thirty-six per cent claim being eco-friendly has helped them save money on energy bills
  • Only 18% of people understand how to use a smart meter to save money on gas and electricity

As part of AXA's sponsorship of the Interior Room Sets & Studio feature at Grand Designs Live, the research shows homeowners also expect energy bills to increase by a further £370 a year, or £31 per month, in the next decade.

According to Ofgem1, the average dual fuel variable tariff in April 2018 was £95 per month, or £1,138 a year, meaning by 2028 utility bills could cost a third more than today.

However, even with heating and power becoming increasingly expensive, homeowners aren't investing in energy-saving technology. A third claim eco-friendly materials such as solar panels and insulation are too costly, while a further third feel they aren't readily available.

What about smart meters?

Thirty-six per cent of homeowners who have implemented eco-friendly practices claim it has helped them reduce the cost of their utility bills. This belief is mirrored by the government, who suggest using technology such as smart meters will help consumers manage their energy use, save money and reduce emissions2.

However, despite their aim for all homes and businesses to have a smart meter by the end of 2020, only 13 million have been installed out of a possible 53 million3. What's more, AXA's research shows that only 18% of people know how to use a smart meter to save energy.

This lack of pick up can be attributed to two issues: firstly, people aren't always ready to purchase new technology when it enters the market. For instance, a third4 of people think it will take another 10 years for connected homes (which include technology such as smart meters) to become the norm in the UK.

Secondly, people still don't trust big businesses. In fact, 36%5 of customers don't think their energy company can provide them impartial advice on how to be more eco-friendly.

The reality is that a large proportion of the UK is willing to change, but overall opinions are still split. For example, AXA's research shows that 50% of customers would pay an average of £16 more for an environmentally-friendly home insurance policy (i.e. if the provider invested in conservation projects or was carbon neutral), however half wouldn't pay any extra at all.

“The UK is spending more on powering its homes than ever before and, despite the government's best efforts, homeowners are still struggling to reduce the amount of energy they use. Solutions such as smart meters are a good idea in principle, but we can see that people still don't understand or trust the companies that provide them. We need to rethink how the government, utility companies, and even insurers, talk about the environment and listening to the public is the first step.”

Gareth Howell, Executive Managing Director, AXA Insurance