Hot money-saving tips for the cold months
Baby it’s cold outside… so naturally energy use is rising – but most people are massively overpaying and can save £100s in minutes. Our Money Saving Expert Martin Lewis is here to warm you up with his energy saving tips.
I don't know whether to GRRR or BRRR. It's cold, so energy use is rising, but 7 in 10 UK homes frustratingly still overpay by an average 35%. Yet it's EASY to sort. It takes minutes to find your cheapest, then it's switched in 17 days. And don't worry, there's no service break – your heating stays on.
The impact can be huge. As Rachel tweeted me: "Consider myself money-savvy, but just done your energy supplier swap and saved £548 a year".
And this is just one example of hundreds of tweets I’ve received telling me of huge savings.
1) It’s quick and easy to switch
Slashing the amount you pay for energy really isn't difficult. It takes minutes to find your cheapest, then it's switched over in 17 days. I got four newish members of my team to do a comparison and on average it took 5 minutes 52 seconds. Those who worry about switching, don’t – it’s the same pipes, gas, meter and safety – you don’t lose supply – the only difference is price and customer service.
2) There’s been a hidden price war over the last year
You may not be aware of it, but energy prices have dropped hugely in the last 12 months. The only problem is most people haven’t felt this as it’s a hidden price war for energy switchers. The standard price – the one most people pay – has remained mostly unchanged (British Gas cut a smidgeon of its prices). Yet the prices of the cheapest deals on the market are far, far cheaper.
If, like 70% of the UK, you’re on a standard tariff, then with typical usage you’re paying £1,095 a year. The cheapest deal on the market for the same use is £787 (that’s variable) whereas the cheapest where you can lock in for a year is £798. This means £300 is a very easy saving for most. As your cheapest depends on where you live and what you use, there’s no one winner, so just plug your details into a comparison site.You can use Martin’s Cheap Energy Club which also gives switchers up to £30 cashback, or any Ofgem-approved comparison site.
And it may well be that you discover you can save without moving supplier; some big suppliers offer far cheaper deals via ‘collective switches’ through local councils or comparison sites. So you may find you can save £100s and stay just where you are.
3) One tariff to mention – a unique unlimited-use deal
With fixed tariffs, while the rate is fixed, if you use more, you pay more. However Green Star’s Unlimited is a 12-month dual-fuel tariff where what you pay is locked in regardless of use. As it’s not that cheap, though still cheaper than the average big-six standard deals, it doesn’t appear high up on comparison sites. But where it really wins is for those, including many elderly people, who want to turn the heat up and not worry. If that’s you it’s worth checking out, but do contrast it against a comparison site’s cheapest.
Quick Q&A
- I’ve only got electricity, can I save? There are cheap deals that allow electricity-only switching. Someone on a standard tariff paying £1,000/year would pay about £750/year with the cheapest. Again just do a comparison, same for economy 7.
- I’m on prepay (key or card meter) – can I switch? Yes. Someone with typical use on a standard prepay tariff pays £1,170/year, the cheapest is £1,050/year, so a comparison and switch will help.
Yet a normal billed meter paying fixed monthly direct debits is far, far cheaper. So if you can, it’s also worth considering if you can change to a normal billed meter – the type most people have, where usage is measured, and you're billed after.
- I’m £100s in credit with my energy firm, will I get it back if I leave? It should give you this money once you’ve switched. Many do it automatically, but make sure you ask if not. In the past, they used to operate a ‘don’t ask, don’t get’ policy, so if you’ve switched previously, it may be worth calling your old supplier to check.
- Struggling to pay? Get extra help this winter Too many people need to choose between heating and eating. Yet there’s help:
a) Winter fuel payments. If you were born on or before 5 January 1953 (and met other qualifying criteria throughout the week commencing 21 September 2015), you’re eligible for the up to £300 winter fuel payment. If you get certain benefits, eg, state pension, pension credit or jobseeker’s allowance, you’ll usually get it automatically – otherwise you may have to claim.
b) Cold weather payments. Anyone on certain benefits, eg, specific income support, jobseeker’s allowance, pension credit, gets £25 for every seven days there are sub-zero temperatures. It’s paid automatically from 1 November this year.
c) Really struggling to pay? There may be special tariffs/help. Try the Home Heat Helpline on 0800 33 66 99.