Could you save £400 in the energy price war?

Published:
23 October 2009
Topic:
News,Gas & Electricity

As another two providers cut the cost of gas and electricity, we ask: are you paying hundreds of pounds more than you need to?

Are you paying more than £400 too much for your energy? Striking another blow for cheaper bills, OVO Energy has cut the cost of its New Energy tariff and the average bill is now just £920.68 a year.

That's an incredible £441.27 cheaper than the average customer is paying for Scottish Power's standard tariff - and £335.10 less than the average bill on the npower standard tariff.

Over the last few months, energy providers have been battling it out to offer the lowest tariff ahead of the winter months, with the cheapest deal now almost £100 less than it was in August.

Switch and save

Incredibly, most of you won't be taking advantage of this. The majority of households amble along on their provider's standard tariff, not realising that the falling prices in the news don't affect them unless they move.

Scott Byrom, moneysupermarket.com's energy expert, explained: "If you're paying for a standard tariff, you could be paying more than £400 too much for your energy.

"A price war just ahead of the winter weather is an amazing opportunity for consumers to save hundreds of pounds, so it really is time to act."

 

However, he did add a cautionary note, saying: "Would-be OVO Energy customers need to be aware that the company sets direct debit payments according to the time of year, rather than balancing it across 12 months of use.

"This means that some customers might switch and find their payments increase slightly - but they will reduce in April next year as energy use falls."

Where's right for me?

Although OVO Energy is now the cheapest provider on average, you shouldn't just assume it will be the best for you.

There are a number of factors, such as your average use and where in the country you live, that affect which energy supplier can offer you the cheapest tariff.

For example, following a recent Scottish Power price cut, the energy firm is now the second cheapest overall but has the best average price for the east Midlands - at just £898.87.

If you're living in that region and have never changed suppliers, you're probably with the incumbent providers - British Gas for gas and E.ON for electricity.

East midlanders on their standard tariffs will be an average of £349.06 better off each year if they move to Scottish Power's cheapest online rate.

Use the moneysupermarket.com utilities page to compare gas and electricity prices, and find the best deal for your household.

Moving online

Remember, the market-leading deals just now are all online. If you want the cheapest bills possible, you'll have to use a web-based tariff.

The good news is these tariffs are actually easier than paper-based billing. Not only is it more convenient, it's easier to submit your own meter readings. That means your bills aren't estimated and you're only paying for what you use.

 Provider

 Average standard tariff

 Average online tariff

 OVO Energy

 N/A

£920.68
New Energy

 Scottish Power

 £1,361.95

 £952.36
Online Energy Saver 7

 First Utility

 N/A

£953.83
iSave

 E.ON

 £1,194.67

£961.77
Fix Online V3

 EDF Energy

 £1,189.40

£982.49
Online V5

 British Gas

 £1,202.43

£993.56
WebSaver 4

 npower

 £1,255.78

£994.15
Go Fix V1

 Scottish & Southern

 £1,192.24

£1,009.52
Go Direct

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