Although it seems like everything in the UK right now is constantly rising in price, there is still plenty of things that you could be doing to reduce the size of your monthly energy bill. We understand that the ideal situation would be to save as much money as possible, with the least amount of effort, and amazingly this exists, but people are just not taking advantage of it. The number one way to save sizeable amounts of money on your energy bills has nothing to do with reducing your consumption, but changing the company that actually supplies you. Well, not necessarily, but changing the tariff that you are currently on. A large number of people have still never switched their energy tariff and are thus most likely to be on their supplier’s standard variable deal which is generally the most expensive that they have to offer. So, why should you switch and how can you do it?
How much will you save?
There is no hard and fast amounts that any one person is set to save when it comes to switching provider; there is a large number of variables that come into play when your tariff price is being calculated, including: postcode; meter type; consumption; payment method; and so on. Prices are completely variable across the country and can’t be expected to be equal to someone you know in another town or city. For example, due to distribution costs and regional static charges, energy suppliers are forced to charge more in certain areas to accommodate the various costs that they are subject to. This means, for example, that Scottish Power prices in Glasgow are much cheaper than they are in Liverpool, and there are many more examples of this across the market.
The key to how much you’re really going to save is the tariff that you are currently on. If you’ve never switched before, it is 99% likely that you are on a variable tariff, which means it could be tricky to see exactly how much you are paying on average. But given that you’ve never changed before, it shouldn’t be too difficult to find out how much you’ve used over a one year period. This can be compared against the yearly estimate that you’ll find on any comparison website. To illustrate just how much you could be saving, here’s British Gas’s standard variable tariff compared with the cheapest on the market (as of 19th July 17).
Usage: 12,500 kWh of gas
3,100 kWh of electricity
Payment: Direct debit
Tariff 1 – British Gas ‘Standard Variable’
Gas – £565.18 per year
Electricity – £465.66 per year
Total – £1,030.84 per year (£85.90 per month)
Tariff 2 – Bulb’s ‘Vari-Fair’
Gas – £391.53 per year
Electricity – £460.51 per year
Total – £852.04 per year (£71 per month)
The most popular supplier in the UK and their most popular tariff, British Gas’s ‘Standard variable’, costs around £1,030 per year for the average consumer. Whereas Bulb’s ‘Vari-Fair’ , which is also a variable tariff, but contains 100% renewable electricity, costs £836 for the same usage. So, what do you gain from paying this extra £178.80? Nothing. The simple answer is nothing. If anything, you are actually losing out because Bulb’s tariff is all-green, meaning you’re helping the environment whilst saving some serious cash.
What’s the best way to switch?
There is no one single way to switch your energy provider, nor is there a ‘best’ option. However, there are those that people choose to use more, as they feel that it gives them a more comprehensive overview of their options. Whether you are the sort of person who likes to do everything online, or you’d rather speak to someone directly on the phone, using a comparison engine is often the easiest and most accurate way to get the best deal on the market. By communicating your details via the appropriate method, you’ll be able to see or hear a full market analysis, which will allow you to choose the cheapest tariff to meet your requirements. The best part about switching your energy supplier, in contrast to many other industries, is that you don’t have to worry about cancelling your previous contract with your current energy supplier: your new supplier or the comparison service will take care of everything after you have given them all the details that they need.
Alternatively, if you don’t want to use a comparison service, you can contact any given supplier directly, whether that be via their online quotation service, or by giving their sales department a call. The only problem with this method is that you only get the price comparison between the tariff you’re on now and the tariff you could potentially sign up for. Obviously, they aren’t going to advertise a cheaper tariff with another company, so other than scouring every single company website and jotting down the prices, your best option would probably be to consult a comparison engine.
Finding a suitable tariff
When looking for their new energy tariffs, many people seem to focus solely on the total price. As much as this should be your number one criteria, there are some other things that you should be thinking about in the back of your mind. Here’s a bit of food for thought for when you start your search:
- Fixed or variable – Having a fixed rate tariff will protect you from price increases and allow you to budget more accurately; however, you may be subject to an exit fee if you wanted to terminate your contract prematurely. Having a variable tariff can give you complete flexibility, but could see your price increase at any time.
- Standing charge – All tariffs are now required to include a standing charge as part of their pricing structure; however, a few have included a 0p standing charge, which is technically still legal. This can work for you if you have a seldom occupied second home. Unit rates are generally sky high, but it could still work out cheaper so that you aren’t paying anything when you’re not in the house.
- Go green? – If you want to help out the environment and sign up for a 100% renewable electricity tariff, many of the big suppliers have started to offer them. Some are a little more expensive than their standard deals, but it helps to change our generation mix in favour of a more sustainable future.
- Multiple companies – You may find that adding together separate gas and electricity tariffs supplied by different companies works out slightly cheaper than dual fuel; however, bear in mind that by doing this, you are putting a whole lot of extra stress on your back for very little reward. Two different billing cycles? Two different termination dates?
- Customer services – We’ve all had bad experiences with customer service departments across a wide variety of industries, which is why before you commit to a two year deal with your new energy company, you should look into their customer service reviews. Obviously the bigger the company the lower their rating will be due to sheer volume of customers, but cross-comparing can give you a good idea of which companies are the worst for mistakes and slow resolution.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.