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Take these 3 steps to reduce your electricity bill by 40% instead

As expected, the 2009 Budget didn't contain help for UK energy consumers even though the cost of gas and electricity now exceeds 10% of most households disposable income.

Consumers are only now paying now for their winter usage of the past month, and sky-high energy rates mean that many households will certainly be struggling to pay for gas and electricity.

We encourage you to follow these three tried-and-tested easy steps to take control of your own energy budget and cut your payments by up to 40% within weeks.

Step 1: Get the right information. Do you really know how much energy you use in your home, at what times, and do you know which appliances do most damage to your bill? Staying in control of your costs is now surprisingly easy, thanks to cheap and innovative new technology. Simply invest in a wireless electricity usage monitor (£30-£50 in any decent electronics store, at Argos, or Maplin) and you’ll be in for a guaranteed surprise! To test this for ourselves, we were kindly provided a device by energy supplier E.ON, which we tested in our own homes for a number of weeks. The results are astonishing. We now know that lighting makes up nearly 40% of our energy bill – far more than we expected – and that leaving the coffee machine in standby cost about £10 a month. Each towel rail, on the other hand also cost £10 per month to keep running.

There were positive surprises, too - for example, computers and flat screen television screens did not consume as much energy as we had expected them to.

Needless to say, we will now be replacing our 50 Watt halogen lighting with lower wattage bulbs. The coffee machine no longer idles away unused and the towel rails are on a timer. Hardly a sacrifice, and our monthly bill has come down by approximately £30.

The monitor we used was installed in a matter of minutes, by clipping a sensor around the electric wire that connects the meter to the fuse box. The separate display device, which can be placed anywhere in the house, then instantly read out the usage in real-time. If you switch to E.ON’s Energy Saver v8 tariff with this service, you can even get one of these devices for free with the welcome pack.

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Result: Knowing how you use electricity will enable you to make easy changes, and help you save at least 10% on your bill.

Step 2: Make sure you don’t overpay. Consumers who pay by Direct Debit should contact their supplier now and ask to review their monthly payments. Take down a meter reading, get the phone number from your last bill and ask your supplier to adjust your direct debit amounts for the summer months ahead, when you will be using less energy. If you have already run up a credit of £150 or more, ask for your money back – this is your right as a consumer.

Result: Adjusting your Direct Debit at this time of the year can save 10% on your Direct Debit.

Step 3: Switch. Suppliers have in recent weeks launched attractive new rates, lifting the average savings from switching to about 20% - that’s even if you switched last year. Even better, some of the most attractive rates are online-only deals (all available through this service) and suppliers now offer energy monitoring software through their websites, as part of the package. British Gas and E.ON have the best online energy efficiency services that we have seen.

Result: Switching energy supplier currently saves 20%.

So, the message from the Chancellor was that we’re on our own when it comes to containing the high cost of energy. Suppliers, on the other hand, will only offer you the best deal if you check the best available offers – if you stay on your current rate, you may well be losing out. And our experience with the usage monitor suggests that there are easy ways to help you reduce consumption.

Florian Ritzmann is Product Director at online comparison service Xelector.com, and has been working with energy suppliers for 10 years.