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If the prospect of getting a 1%-2% return on your savings has left you distinctly unimpressed, it could be time to consider the 'spend to save' option the upfront investments that pay you back with reduced future outgoings. For most of us, this will mean introducing energy saving or generating measures.
While your capital isn't protected in the same way as your savings in the bank, the financial returns are now significantly better than those paid by most high street institutions.
Cheaper light
Good-quality low-energy light bulbs can be bought for as little as £1 each. Replace all the lights in your house with energy-saving bulbs and you could save around £50 a year, or £675 over the lifetime of all of the bulbs, which are designed to last 10 years. If you spend £25 on the bulbs, you are doubling your money in the first year.
Fill your cavities
Just insulating cavity walls could typically save you around £160 a year on fuel bills (and 800kg of CO2) less in smaller homes and more in larger ones. Installation is around £250 (when subsidised under the Carbon Emissions Reduction Target), so it would pay for itself in well under two years.
Loft insulation, costing a similar amount, will save you anywhere between £50 and £250 a year in lower heating bills, depending on how much insulation you already have.
Solid wall insulation is more complex, and aimed at homes with severe heat loss problems. It involves adding a decorative weather-proof insulating treatment to the outside and costs a hefty 5,600. But it could save as much as £500, which puts payback at around 11 years (although that falls every time energy prices rise).
Make your own hot water
Fitting a solar water heater typically costs £3,000-£5,000, but given a good summer it is easy to trim 15%-20% off heating bills. The low carbon buildings programme will give you a £400 grant, and your local authority may donate an extra £600-1,000. You need a suitable south-ish facing roof, and a hot water tank. In return, around 90% of your water will be heated free in the summer (much less in the winter), and you could save £100 a year double if you now use electricity.
If you can get the outlay down to £2,000 (there are cheaper DIY schemes out there), youll be in credit after 15-20 years sooner, if future energy prices rise. A professionally installed system should also add value to your home.
... and electricity?
If you've got a bit more to invest, set up your own mini-generating system.
The case for photovoltaic cells, which generate a usable supply that is fed back into the grid, gets brighter each time energy prices go up. Prices vary depending on the size, but the average domestic system will set you back £7,500-£15,000. Most are between 1.5kWp and 3kWp.
If you intend to have major roof repairs, it may be worth exploring PV tiles as they can offset the cost of roof tiles. You need a south-facing roof that is shadow-free. Solar panels are not light, and the roof must be strong enough to take the weight, especially if the panel is on top of existing tiles.
A 3kWp system could provide enough electricity to meet most of a household's needs, saving £400-plus a year. Grants are available: go to the low carbon buildings programme website (lowcarbonbuildings.org.uk) or call 0800 915 0990.
Change your appliances
If you are using an old fridge/freezer thats on its last legs, consider swapping it for new A++ rated model. It might cost £500, but youll get this back by saving £50-60 a year more if you can get rid of a second freezer.
Also, full dishwashers use less water and energy than washing by hand. The latest washing machines do likewise but dont change unless your existing model is reasonably old.
If you are a big tumble-dryer user, consider switching to a far cheaper-to-run gas model. They start at around 300 (try gastumbledryers.co.uk) and could easily save 40 a year.
... and generate your heat
If your home has a working fireplace, don't waste your time with an open fire
Installation is around 250 (when subsidised under the Carbon Emissions Reduction Target), so it would pay for itself in well under two years.
Loft insulation, costing a similar amount, will save you anywhere between £50 and £250 a year in lower heating bills, depending on how much insulation you already have.
Solid wall insulation is more complex, and aimed at homes with severe heat loss problems. It involves adding a decorative weather-proof insulating treatment to the outside and costs a hefty £5,600. But it could save as much as £500, which puts payback at around 11 years (although that falls every time energy prices rise).
Make your own hot water
Fitting a solar water heater typically costs £3,000-£5,000, but given a good summer it is easy to trim 15%-20% off heating bills. The low carbon buildings programme will give you a £400 grant, and your local authority may donate an extra £600-1,000. You need a suitable south-ish facing roof, and a hot water tank. In return, around 90% of your water will be heated free in the summer (much less in the winter), and you could save 100 a year double if you now use electricity.
If you can get the outlay down to £2,000 (there are cheaper DIY schemes out there), you'll be in credit after 15-20 years sooner, if future energy prices rise. A professionally installed system should also add value to your home.
replace it with a wood-burning stove. More than a year ago, I spent £700 on buying and installing one in our modern home and it has been a huge success. We salvage waste wood from a skip outside a joinery and, combined with sawdust briquettes (£1 a bag), use it to largely heat our home.
We still use the gas central heating first thing in the morning, but once up we keep the stove going all day. The whole house slowly warms up it makes particular sense if one person is at home all day. It helps if you have an open-plan house, and wood floors rather than expensive carpets.
We have slashed our gas bill in half, and save around £350-£400 a year. The payback period is around two years.
The downsides are it is messy - a dustpan and brush is rarely far away, and the savings rely on a free source of wood, which not everyone has. However, there's nothing better than sitting in front of your stove that is burning wood otherwise destined for landfill.
Plus some things not to do
Despite the adverts, I can see no economic reason to pay £3,000 to swap a perfectly functioning gas boiler with a more fuel-efficient model. The 30% savings claims made by boiler salesmen are never achieved (in reality, you will be lucky to save more than 15%). Most homeowners will be better off waiting until their existing boiler dies.
The same goes for cars. Last year's massive petrol price hike sent buyers scurrying for smaller, cheaper-to-run models. The price of 4x4s collapsed, and super-minis became super-desirable.
Unless you have a Range Rover, and drive 30,000 miles a year, most people won't save any money by trading in a perfectly functioning car. Someone driving 12,000 miles a year in a car that does 35 would save just £300 a year by swapping to a gleaming new diesel that does 50mpg. Hardly worth the £10,000 purchase cost.
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