It may sound glib and obvious but most households – around 15 million - have never switched energy provider and as a result are paying more than they need for their gas and electricity.
The recent price increases have added 17.4% to the cost of gas while electricity has gone up by an average of 10.8%. As a result households will be paying an average of £1,287 a year for their energy - £155 more than last year.
Yet many could slash their annual bill by hundreds of pounds a year.
If you have never switched energy firm you will be paying your provider’s standard prices for gas and electricity. By moving to a better deal you could save an average of £237.
This means that as a nation we’re throwing around £3.5 billion down the drain simply because we are failing to take advantage of the most competitive energy deals.
With many households struggling to make ends meets, this is money we should be doing everything we can to hold on to rather than continue letting it go up in smoke.
Ofgem has said energy firms must do more to ensure customers are on the most competitive tariff, but in the meantime it’s an easy thing to do yourself.
Where do you start?
The first thing to do is make sure you aren’t tied in to your existing deal. If you’ve never switched gas and electricity providers before it’s highly unlikely you will be but if you took your current deal within the last 12 months, there could be a penalty to pay if you switch before a certain date.
Once you’ve made sure you aren’t tied in you can get the ball rolling.
The simplest way to identify the best tariff for you to move to is to use MoneySupermarket’s online comparison tool.
What information will I be asked for?
You’ll be asked information about your current supplier and how much gas and electricity you use, or how much you currently pay, so it’s worth having a recent bill to hand.
You’ll also be asked whether you want a dual fuel tariff or separate gas and electricity providers (it's worth checking the cost of adual fuel tariff against separate tariffs to see which is cheaper); how you’d like to pay (monthly direct debit will be the cheapest); and what type of energy deals you’d like to compare (online, fixed and green).
Online variable tariffs are usually the cheapest. However currently there is no difference in the annual cost between the best value online deal, which is npower’s Sign Online 24, and the cheapest fixed rates which are EDF Energy’s Fix for 2012 and Ovo Energy’s New Energy Fixed tariff. These will bring the annual energy bills for the average household down to £1,050.
It’s important to note however, that these products won’t necessarily be the best for you – it will depend on where you live and the amount of gas and electricity you use. This is why it’s well worth using an online comparison tool to calculate the best value tariff for your circumstances.
Once you’ve answered those questions you’ll be shown how the prices of various tariffs compare and the difference in the annual cost between those and your current deal. You can then choose which one you want and click through to apply.
Your new energy provider will then handle the switch.
You’ll be notified when your supply will be transferred over from your existing provider and you will be asked for meter readings at that time so it can calculate a final bill. It should take between four and six weeks for the transfer to complete so if you apply now, the switch will have gone through in time for Christmas.
Our energy consumption soars in the winter months, so now really is the time to ensure you’re on the best possible deal.
It really is that simple so take a few minutes now to find out how much you could save by switching and get the process started.
How often do you need to switch?
I switch my energy provider every year. The exact time to move will depend on the terms of your current deal as there may be a penalty to pay if you switch within a certain time
If you opt for an online variable tariff you will benefit from a number of discounts which contribute to a lower annual bill. These include a discount for online billing (as opposed to receiving paper bills), money off for paying by monthly direct debit and a discount off the provider’s standard gas and electricity prices. However, to deter you from jumping from provider to provider too frequently, you will only benefit fully from these discounts after 12 months and there could be a penalty to pay if you move sooner.
If you decide to go for a fixed rate tariff you will have the guarantee that the price you pay for your gas and electricity will not change for a fixed length of time. As with the online variable tariffs, this will include a discount for paperless billing and paying by direct debit and you will usually be tied in for the duration of the fixed term.
Please note: Any rates or deals mentioned in this article were available at the time of writing.