How to take on your energy provider
Three of the big six energy providers are cutting the price on its standard tariffs - woopdeydoo. These cuts are small and 70% of UK households are still being ripped off, typically paying more than £300 a year excess on their energy bills. So our Money Saving Expert Martin Lewis is here to show you how to take on your energy provider.
Last week Eon was the first of the big six energy providers to cut its standard tariff on gas only by around 5%. And next month, SSE and Scottish Power will cut its to, but after most of the big winter bills are over. Yet this is trivial. A 5% cut means that bills on a standard tariff will be cut by average £32/year. Yet even after that all these providers will be over £1,050 a year for someone on typical dual fuel use – while the markets cheapest deal is below £750.
It's so EASY to switch but I'll walk you through it below. And don't worry, there's no service break so your heating stays on throughout.
The impact can be huge. As Barry emailed emailed me: "Was paying £52 for electricity and £89 for gas. Deal with SSE works out just under £89 saving us £624 . Well worth the half hour getting accurate usage figures". And this is just one example of hundreds of emails and 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. Use a comparison site but do it the right way
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 and it'll tell you the best deal for you.
To do this, you need your address, your current tariff and your usage. The best usage to put in is your Kilowatt hours, if not your annual cost, if not monthly cost, if not then just do a guesstimate – while you may not get the perfect result or exact savings, if you’re on a standard tariff the end result will still be a substantial saving.
To do a comparison you can use Martin’s ‘Cheap Energy Club’ or alternatively you can use any Ofgem-approved comparison site, but if so do watch for two things.
- Ensure it searches all tariffs
Some comparison sites by default will only show you the tariffs that they get paid for. This filters out some of the cheapest deals. Make sure when you’re doing a comparison you've selected the option to see all the results, that way you’ll get to see the best deals.
- Beware personal projections if you’re on a fixed tariff
When doing a comparison, most comparison sites (though not all) follow the regulators guidance and show your ‘personal projection’ which is effectively your average energy cost over the next year. Which is normally fine, but is effectively nonsense for anyone on a fixed tariff ending within 12 months – something I’ve campaigned against, to little avail.
For example, if your current fix costs £800 a year and ends in four months, and after you’ll then pay £1,200 a year, as you’ll be on the energy firm’s standard tariff, the personal projection assumes you’ll be paying £1,066 in a year – as it’s averaged the cost over 12 months. But if the market’s cheapest deal is £900 a year the results will show you can switch and save £166. While this is right over a year, it's a bad move to switch now as you’ll pay more for four months, so you should wait.
3. If you don’t want to change supplier, change tariff. Many confuse changing tariffs with changing companies, but you don’t necessarily have to. For example, if you're on Eon's standard tariff which on typical usage is £1,047/year you can switch to its cheapest 12 month fix, which is actually one of the markets cheapest, at £765/year - a saving of £282 and you haven't even changed supplier.
If you're on your energy providers standard tariff and don't want to switch provider ask them what its cheapest tariff is and switch to it. So do a comparison and if you really don’t want to switch (not a big deal to do it, but some don’t like it) at least move to your supplier’s cheapest.
Also 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.
4. 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 £1,163/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.