Saving money on your energy bills doesn’t have to be stressful nor does it have to take a long time. For years we’ve had to stand by and watch as prices for everything in our daily lives continue to rise, but now is the time to do something about it. As independent energy companies have begun to wrestle a sizeable portion of the market share away from the ‘big six’, prices have started to become much more competitive, meaning there has never been a better time to switch energy tariff than now. Switching your energy tariff takes minutes and, especially if you’re a first-time switcher, can save you hundreds of pounds every year. In this post, you’ll find everything you need to know about making the switch.
Why should you switch tariff?
There is a huge number of reasons why you should switch away from your current energy deal; however, we can break them up into four key reasons: to save money; to protect yourself against price rises; to go green, and to encourage competitive prices.
To save money
Just by taking a quick look on any comparison website, you can see just how big the price difference is between the cheapest and most expensive tariff on the market. For an average consumption of 3,100 kWh of electricity and 12,500 kWh of gas, you could be paying up to around £400 more than you need to be. Energy suppliers will automatically put you onto their most expensive, variable tariff if you haven’t organised to switch to a cheaper tariff. This is how the ‘big six’ have operated for years: relying on their customers to not switch and just keep them on their most expensive tariff. Don’t let them take advantage of you; take control of your energy bills.
To protect yourself against price rises
Your gas and electricity tariffs are made up of two principal price elements: unit rate and standing charge. The standing charge is a recent structural addition by Ofgem to highlight the static charges that your energy supplier has to pay the network operators and various other payments. This price won’t change. Your unit rate is the price per kilowatt hour that you will pay for your energy. This will change.
Prices change according to a variety of variables, such as generation efficiency, wholesale prices and time of year. If you’re currently on a standard variable tariff, most likely because you haven’t switched yet, you will feel the curvature of this change; however, there is a very simple way to protect yourself against the inevitable price rises to come: get a fixed rate tariff. Locking in a single unit rate price and signing this for a contract term of a year or two will allow you to budget more efficiently and prevent any sudden changes to your bill. Also, it is usually the case the fixed tariffs are much cheaper than variable tariffs. This is perhaps as an incentive to guarantee a customer’s service for number of years. It is probably worth noting at this point that even if you sign up for a contract for x amount of time and you want to terminate it early, you can switch, but you may be subject to an ‘exit fee’. This usually amounts to around £40 per fuel.
To go green
As worldwide demand for energy skyrockets, while our primary source of electricity generation, fossil fuels, deplete, more and more emphasis is being placed on actioning a renewable energy plan. As such, energy suppliers across the country have started to provide 100% green tariffs, which remove your usage amount directly from unsustainable sources. The more support that we provide for renewable generation, the sooner we will see a green United Kingdom, leading the way and setting an example for the rest of the world.
Continue the trend
As mentioned, for years since the privatisation of British energy markets, the big six energy companies (British Gas, Npower, Eon, EDF Energy, SSE & Scottish Power) have relied on their customers to not switch provider, keeping their dominance by default. However, since the emergence of a number of independent suppliers who have begun to take back a sizeable portion of the market share, competition has increased, forcing all companies on the market to be much more reasonable with their pricing. So whether you choose a big six company or an independent, switching tariff is nothing but positive for the consumer and will continue to shift the power back to the consumer.
Something to consider
One of the factors that perhaps most affects the price of your quotation is your postcode. Due to varying distribution costs around the whole of Great Britain, unit rates will vary through different suppliers depending on where you are in the country. This can mean that EDF Energy prices in Nottingham, for example, will often be much cheaper than they are in Torquay, and this trend continues throughout the entire country. As such, if you’re moving house and you realise that your tariff has changed in either direction, this is most likely due to your postcode change. As long as you are in England, Scotland or Wales, however, all tariffs on the market will be available to you regardless.
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