Honey, I shrunk the energy bills
11 July, 2017
What would you do with an extra £300 in your pocket? According to Ofgem, the government regulator, that’s how much the average UK household could save each year by switching gas and electricity supplier. Loyalty doesn’t pay, and unlike other household bureaucracy overloads like doing taxes or getting a mortgage, switching your energy is really easy.
You may not have realised, but energy companies raised their prices 57 times last year. 57?! Compared to 15 times in 2017, and 0 times in 2015 and 2016, it’s an eye-watering fact to consider. To put that in real terms, if you were with the worst offender, Economy Energy, your bills would be 38% higher than the year before. *pause to hyperventilate*
This year, to mark an end to the madness, Theresa May introduced a price cap. Good news, right? Sure, if you’re lazy. You see, the people hit hardest by energy price explosions are the people who remain loyal to their suppliers, year after year after year. The best and only way to avoid excessive bills is to regularly switch to a new deal. The price cap can’t beat this, and actually makes it more attractive to remain lazily loyal. So here’s what to do…
Step 1: Choose some price comparison sites
You can’t beat price comparison sites for getting all the details lickety-split. But seeing as different sites cover different suppliers, make sure you check a few of them to find the best deal for you. Ofgem has a list of 11 recommended price comparison sites (https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/how-switch-energy-supplier-and-shop-better-deal/compare-gas-and-electricity-tariffs-ofgem-accredited-price-comparison-sites) including uSwitch, Money Supermarket and Quotezone.
Step 2: Compare energy suppliers
Once you’ve added your details to the comparison sites – including where you live and who you live with, how often you stay in, and what type of fuel you use – you’ll be presented with a list of suppliers. Don’t just look at the unit prices – pick the overall plan that works best for you.
• Decide whether you want a fixed or variable unit rate. Fixed keeps the cost the same throughout the year, whereas variable (believe it or not) varies. It’s up to you if you want to gamble on energy prices rising or falling as the seasons change.
• Consider specialist tariffs like Economy 7, which charges much less for off-peak energy – great if you use the washing machine or storage heaters overnight.
• Check if your current energy contract includes any exit fees and see if they’ll outweigh your potential savings – although exit fees are rare for standard tariffs.
• Work out if you’ll get a dual fuel discount for taking gas and electricity from the same supplier, or if you’ll be better off using two different suppliers.
Step 3: Take a meter reading and put your feet up
That’s all there is to it. Once you’ve picked the deal for you and given your new supplier your meter readings (here’s how if you haven’t done it before), you’re all set to forget about your energy supplier until next year – when it’s worth repeating this process.
All in, you should be looking at about 21 days for the switch to take place.
Extra ways to save
Pay by direct debit: Almost always cheaper and takes away the worry of missing a payment. You might be able to shave off a few quid with paperless bills too.
Use less energy: Not much of a shocker, this, but as many of us take energy for granted it’s worth saying. Things like spending 1 minute less in your daily shower and turning down the heating by 1 degree can save £7 and £75 a year respectively. Here are some suggestions from the Energy Saving Trust (http://www.energysavingtrust.org.uk/home-energy-efficiency/energy-saving-quick-wins).
Go eco-friendly on government money: You could save up to £250 a year (after the upfront costs) by insulating your loft and making other eco-friendly home upgrades. Plus, your home might be eligible for a grant to cover some of the costs. Start with a free Home Energy Check (http://www.energysavingtrust.org.uk/domestic/content/home-energy-check) and then use gov.uk's Energy Grant Calculator (https://www.gov.uk/energy-grants-calculator/y).
If it all gets a bit too much…
Speak to your supplier and see how they can help you. If you can’t afford your energy bills, they’ll work with you to set up a repayment scheme. And if you’re on benefits, you may be able to use the Fuel Direct scheme to cover some of the costs. Read all about struggling with energy bills on the Citizens Advice Website (https://www.citizensadvice.org.uk/consumer/energy/energy-supply/get-help-paying-your-bills/struggling-to-pay-your-energy-bills/).
All done? Now all that’s left to do is plan how you’ll spend that extra £300 or so a year. Or if you’re really on a financial fitness flex (https://www.boringmoney.co.uk/learn/articles/new-years-resolution-managing-money-2019/), how you’ll save it and let it grow.
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