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Energy bills update: Should you switch?

April 28, 2011 Leave a comment

As we emerge from the coldest time of the year, when energy use peaks, prices are stable. Unfortunately, they’re also higher than they were before the cold weather set in.

However, things may be about to change in the energy market. Ofgem has announced a huge overhaul of energy market rules that will do away with the many of the tariffs currently available, simplfy pricing and make suppliers more accountable.

Experts are predicting price rises across the market as continuing unrest in the Middle East pushes up wholesale energy costs.

‘The best tariffs, particularly low-cost fixed rates, are filling up fast and once they are oversubscribed, providers pull them,’ says Mark Todd, managing director at switching service energyhelpline.com.

‘If you’re looking to switch, you must act fast as prices are likely to start to rise by late summer.’

Npower’s Go Fix 5 tariff is fixed until May 2012 and costs £963 a year, based on the benchmark usage quoted above.

EDF is offering Fixed Price 2012, also a one-year fixed tariff, at £1,009 a year. ScottishPower has a three-year fix at £1,081. But these deals won’t be around for long.

The typical dual-fuel tariff for standard energy deals is £1,150 a year, according to Energyhelpline.

Consumers pay a premium to fix their bills, but with prices set to rise the gamble could pay off, particularly over three or four years. Of course, if energy prices fall then you will be paying over the odds.

Gas oven

How to get cheaper bills If you’ve never hunted down the best deal you are likely to be on a standard tariff.

Anyone interested in paying the least possible for energy should have little interest in standard tariffs. They should watch the ‘online’ tariffs, where you apply over the internet. Online tariffs are traditionally cheaper than standard tariffs.

Energy switching: The background

If you have never switched suppliers, or haven’t switched for an extended period of time, then now is the time to do it. Suppliers offer their cheapest rates via online tariffs so if you’re ready to switch, it will certainly pay to do so.

Suppliers tend to charge more for electricity to those customers who live in their ‘home’ region – the areas where they enjoyed a monopoly before energy deregulation. So switching away will almost always save you money.

Prices are different all over the country and the cheapest supplier for you will depend where you live. You only need to be interested in the tariff that is going to be cheapest where you live, so do your own comparison to find the best price.

Which suppliers have the best record on prices?

Customers hoping to single out one consistently competitive energy supplier, to avoid switching every year, face a difficult task.

gas bill

There are a dizzying number of options facing customers when they come to choose a new supplier and comparing like-with-like on energy is difficult.

For a period a few years ago, Scottish & Southern Energy (which also trades as Southern or Atlantic) could be relied upon to consistently be one of the cheapest on ‘standard tariff’ energy. These are the prices which the majority of customers pay because these are the prices for those customers who have never switched supplier, simply becoming a customer of the incumbent energy supplier in their area after deregulation of the energy market.

In the past three years, British Gas has stepped up efforts to compete on standard tariff prices and for a while was consistently the cheapest provider.

However, looking at standard tariffs is a false picture. If you are looking to switch to a cheaper supplier, it makes the most sense to opt for an ‘online’ tariff. The energy is exactly the same, but customers forego quarterly paper bills, they pay by direct debit and deal with the supplier online only.

Online tariffs are cheaper than standard tariff and suppliers launch and withdraw online offers almosty constantly, so the cheapest supplier will change every few months.

Energy companies are worst culprits for incorrect billing

April 27, 2011 Leave a comment

10.4 million households have unexpectedly owed money to their energy supplier following a discrepancy between an estimated bill and “real” bill.

When it comes to getting your bills wrong, energy companies are some of the worst culprits, according to new research from comparison site uSwitch.com.

Meter readings mean fewer inaccurate bills

In the last two years, 27% of Brits have been billed incorrectly by their energy company and, for 14% of householders, this has happened more than once.

“Inaccurate bills mean consumers end up out of pocket and wasting time and effort trying to resolve billing blunders,” said Ann Robinson, director of consumer policy at uSwitch.com.

On average, each inaccuracy took over two months to resolve, although 40% were sorted out within a week, a 4% improvement on last year, says uSwitch.com.

The survey also found:

  • Over 10 million households (40%) have unexpectedly ended up owing money to their energy supplier, due to an incorrect bill
  • 14% of households have found themselves owing sums ranging from £200 to £400
  • 8% have ended up owing over £400.

“The fact a growing number of households are providing suppliers with meter readings mean fewer inaccurate bills, less money being owed as a result, and less time being taken to resolve mistakes,” added uSwitch’s Ann Robinson.

“This is extremely welcome, but is certainly no reason for the energy companies to become complacent.”

By Martin Fagan – consumerchoices

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