Energy bills: Could you cut your fuel costs by switching to the best deals?
The average household handed over an eye-watering?￡1,123 of their hard-earned cash to their energy provider last year.
Since then the energy giants have hiked their prices, meaning families could face even higher bills this winter.?
But you don't need to put up with soaring energy prices.
Switching to a better deal could slash your bills by hundreds of pounds per year as those on the cheapest tariffs pay closer to ￡800 per year.
Bills: If you've never switched supplier then you could save a substantial amount by moving to a different firm
Rule number one - ditch the standard variable rate tariff
Standard variable rate tariffs (SVR) are the out of contract deals your energy provider will move you to once your fixed deal ends.
They are much more expensive adding an average ￡262 to annual fuel bills, according to recent figures from First Utility.
Plus these are the tariffs which energy suppliers can hike costs on.
Prime Minister, Teresa May, announced plans to cap the amount energy suppliers can charge on these expensive out-of-contract deals, cutting annual bills by up to ￡100.
But households shouldn't wait for Government intervention as they could save ￡200-￡300 NOW by switching to a better deal.
The Big Six's grip on the energy market is slowly beginning to loosen as more and more households ditch them for smaller suppliers.
These energy minnows now dominate the best-buy tables as well as often offering better service.??
And you might be surprised by how simple the switching process can actually be.
Those on the hunt for a better deal have heaps of choice whether it is a long-term fix, variable rate or tariff from a smaller or green supplier you are looking for, with tariffs cut to well under ￡1,000.
Although the savings from switching are not quite as big as they were a few years ago switching should remain a key part of your personal finance maintenance.
If you are one of the millions of people who have NEVER switched (i.e. stuck with your original supplier), then you could also save a big chunk of cash.
If you want to cut straight to comparison, you can compare energy tariffs, with the choice of entering your own energy use, using our energy price comparison tool - click here
Things to remember?
Your bill will show two costs - a fixed standing rate charge and the price per unit (or Kwh of energy used).
Online plans paid by direct debit are still the most competitively priced and if you have never switched, choosing one of these will save you the most money.
You can either opt for a variable rate tariff, where the price can go up or down or a fixed rate tariff which gives you a secure price on each unit of electricity you use for a set period.
SAVINGS: TRICKS AND TRAPS
1) Regular meter readings.?Make sure you check every time you receive a bill, rather than relying on an estimate by your energy provider's estimate.
2) Change to online bills. You could save up to 10%.
3) Avoid prepayment meters if you can, and swap to a billed meter. Even if you have to pay to get one, it's probably worth it for the savings you'll gain.
4) If you're in financial trouble some companies offer special deals, which help ease any difficulties you might be facing. But don't just assume this will be the cheapest option - make sure you still do your homework.
5) Dual fuel (gas and electricity from the same supplier) is not always the cheapest option.
6) Monthly direct debit payments?could save you 5-10% as companies are more confident that customers won't default and earn interest on any overpayments. Check any extra payments are refunded at the end of the year.
5) Swot up on how to lower your energy use?
Here's a few top tips to help you save more money by cutting your gas and electricity use
Historically variable rate tariffs have tended to be cheaper. But at the moment the cheapest rates are currently offered on one-year fixes and all of the Big Six have pledged to freeze even their variable rates until 2015.
However you will still pay a premium if you want long-term price security.
But, some may still find that they save money switching to a fixed tariff, particularly if you've never switched and are not signed up to a duel fuel and paying by direct debit.??
Should you fix?
Energy prices have been relatively low over the past two years, however prices are creeping up thanks to a jump in wholesale costs meaning if you are thinking of switching it could be worth considering a fixed tariff to help shield you from a mid-winter price hike.?
Tariffs of this type will fix the rate you pay for each unit of electricity used for a period, typically 12-18 months.?
Stephen Murray, energy expert at MoneySuperMarket, explains: 'Wholesale prices have been rising since early summer and with it the prices of the cheapest fixed deals in the market.
'Brexit, oil prices and exchange rates can all be reasons for this and whilst wholesale costs seem to be dropping again slightly the pressure is still on standard priced tariffs going up in the first half of 2017.?
'Two year or two winter fixed deals are becoming more popular at the moment but whether customers fix for 1 year, 2 years or longer the message is to move away from the expensive and variable standard tariffs now.'
You will usually pay slightly more than the cheapest deals to buy long-term security, and be careful as some do come with exit fees if you do want to leave early.
There is no guarantee fixing will be best for the long-term but it gives certainty over bills as household finances are squeezed.
Remember: This doesn't mean you will simply pay a fixed amount. Your bill will still depend on the amount of energy used - you just pay a certain amount per unit.
Price comparison services, like the one here at This is Money, allow you to specify which type of tariff you want.
Who is cheapest?
The table below lays out the top plans for customers paying by direct debit in arrears.
Bill sizes are based on the average medium user - remember the cheapest tariffs can be variable rates, leaving you open to price increases.?
But fixed deals currently dominate the best buys, and you could get an average bill below ￡1,000.
|Rank||Supplier||Plan name||Average bill size||Tariff type||Cancellation fees|
|1||Outfox the Market||Zapp! November Tariff (medium consumption)||￡805||Variable||-|
|2||TOTO Energy||TOTO Smart Meter Saver||￡827||Variable||￡25.00 per fuel|
|3||Economy Energy||Online Saver||￡831||Fixed||￡25.00 per fuel|
|4||Breeze Energy||Breeze Fixed 1 Year Saver||￡834||Fixed||-|
|5||Green Network Energy||GNE Italian Touch 12 Month Fixed V10||￡853||Fixed||￡25.00 per fuel|
|7||Tonik Energy||Positively Green v3||￡860||Fixed||-|
|8||So Energy||So Kangaroo||￡869||Fixed||￡5.00 per fuel|
|9||One Select||Secure 1 Year Fixed September 17||￡870||Fixed||-|
|10||Affect Energy||Fixed Until November 2018||￡883||Fixed||￡25.00 per fuel|
|Source: uSwitch, correct as of November 3 2017?||?||?||?|
Energy switching: The background
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.
- See how much money you waste each month by NOT switching supplier - just click here and enter your postcode
However, although some tariffs incur cancellation penalties if you leave before the term expires, it may still make sense to switch now and accept the penalty if it is small and your potential savings are big.
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