Brace yourself. Energy bills are about to be hit by a double whammy. The big firms are all putting their prices up (again) and many of the cheapest deals you can switch to have been pulled. Let me be plain – now is the time to switch before winter. Every week’s delay risks you paying more.
If you’re on a standard tariff (i.e. the hideously expensive one most people are on), then with typical bills you’re overpaying by £360 a year, so if you don’t act you’re ripping yourself off.
All the big six providers have put up prices this year, and now we’ve had a second round from four of them, which are due to hit your next bills. As for the two which haven’t done it a second time, that could still come.
Compare the big six’s prices in the table on this page to the cheapest deals on the market and you’ll see huge savings. Yet speed is of the essence.With wholesale prices (what energy companies pay for energy) rising, many cheap deals are ending and being replaced by more expensive ones.
The cheapest one-year fix at the beginning of August was £867 a year. Today the cheapest fix deal is £978 – a rise of more than £111 a year in the past month alone. For the moment this trend looks likely to continue, so the quicker you sort it out the better.
Yes, there’s a price cap coming, but don’t sit on your hands waiting.
The regulator Ofgem has said it will introduce a cap on standard prices by the end of December. For someone who uses a typical amount of energy, it’ll be £1,136 a year fixed for six months. That will mean those on big six standard tariffs will see a reduction.
While Ofgem calls this a “fair” price, that doesn’t mean it is a “good” price – the danger is that people will get a false sense of security that they’re on a good deal – whereas you can lock in a fixed deal for a year at up to 20 per cent cheaper.
Plus, the price is only fixed for six months and after that the way wholesale prices are moving, it’s likely they’ll rise again. Whatever your energy set-up, whether it’s direct debit or prepay, electricity only or dual fuel, as your cheapest deal depends on where you live and what you use, there’s no one winner.
Therefore, the answer to how to find the cheapest deal is simply to use a comparison site. Do beware, comparison sites are now allowed to only show you tariffs that pay them, as many of the big ones do this, which means you may not see all the deals.
There’s a full list of comparison sites at www.ofgem.gov.uk or you can use my www.cheapenergyclub.com which includes all the market’s deals by default (and it also gives you £25 dual fuel cashback if you switch).
It’s best if you have your bills to hand to do this, but even if not, most comparison sites will estimate for you. Just do it: the sin of inaction is bigger than the sin of inaccuracy.
Those who aren’t online can call up some comparison sites too (or ask friends who are more web savvy to help them).
If you’re put off by the fact that your winners are names you don’t know – don’t be. Simply scroll down to one you do know – or one with a good customer service rating. You don’t have to go for the very cheapest, go for one you’re happy with.
Don’t think switching is complicated. It’s not. It only takes minutes to find your cheapest deal and then it’s switched over in 17 days. Those who worry about switching, don’t – it’s the same pipes, gas, meter, safety and you don’t lose supply – the only difference is price and customer service.
More than 3.5 million homes are on British Gas’ standard tariff. By far the best thing to do is a full comparison. Yet if you’re loyal and want to stick with British Gas, it has launched a new dual fuel, direct debit tariff (where you get both gas and electricity from it) called Energy Plus Boiler Cover Oct 19. This is available for both new and existing customers who apply online (or better via a comparison site to see exactly what it’ll cost).
On average it is £1,020/year (though it depends on your region) and the price is fixed for a year, so it won’t rise in October – meaning a typical saving of £185/year. It also includes British Gas boiler insurance for no extra cost. As you’d normally pay £50-ish for that, it takes the saving to more than £200. If you don’t already have a British Gas Smart meter, it will install one as part of this. All that means is you won’t need to give meter readings in future.
At the very least, if you’re currently a British Gas customer, and want to stick with it, this is often a no-brainer saving. British Gas isn’t the only one, other big six firms have much cheaper tariffs than their standard ones too, especially Eon and EDF at the moment.
Martin Lewis is the founder and chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip.