Act now to bag a better energy deal

With energy prices set to rise, we look at why now is a good time to lock down a cheaper tariff.

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Thinking about your energy bills might seem counter-intuitive in the summer when the sun is shining and the weather is warmer.

But by reviewing your tariff now, you can make the move to a cheaper deal before temperatures drop in a few months’ time – when usage will go up, meaning bills are at their most expensive.

Now is also a good time to take action as energy costs are starting to rise as a result of lockdown restrictions being eased.

By switching now, you can take advantage of the current low prices on offer and lock in costs for the winter – meaning you could be better off when you do eventually turn on the heating.

Why are prices low at present?

The Covid-19 lockdown gave rise to a reduced energy demand in the wider economy, with the drop in business and industrial use of energy contributing to a major fall in wholesale energy prices.

As a result, for the past few months, consumers have enjoyed some of the lowest energy prices seen in the market in recent times.

Will prices stay low?

No. New analysis of the top 25 cheapest tariffs in the UK by MoneySuperMarket shows that as we begin to emerge from lockdown, prices are starting to increase.

On April 1, the average cost of the top 25 cheapest tariffs was £810. However, by July 6, this had increased by 3% to £835.

Don’t sit on a standard variable tariff

If you are on your provider’s standard variable tariff, you need to act right away – as this type of tariff tends to be expensive, meaning you might be paying far more than you need to for your gas and electricity bills.

You may be on this type of tariff if your fixed energy deal came to an end during lockdown, so check now, and see if this has happened.

Equally, if you haven’t switched supplier for 12 months, you are also likely to be paying over the odds for your energy.

So what should I do?

You should look at switching to a cheaper fixed rate deal right away to get the best possible price.

By fixing now, you may be able to lock in costs for next winter while prices are low.

This should shave a sizeable amount of your bill immediately, and can also protect you from pricing uncertainty for the term of your new tariff.

How much could I save?

You may be able to save an average of £290* by moving onto a fixed rate deal.

There are currently more than 120 deals cheaper than the price cap rate of £1,127.

How do I go about switching?

If you are thinking about comparing energy deals and moving to a new tariff the good news is, switching is simple.

It only takes a few minutes online. All you need do to is tell us details such as your postcode, the supplier you are with at the moment, the tariff you are currently on, and how much energy you use.

You should be able to find this information on your latest bill. But don’t worry if you can’t. We can estimate your energy usage based on what you tell us about the property you live in, how many rooms it has, and the number of people who live there.

Once you’ve provided this information, you will see a list of tariffs and can then click on each on to get more information – to help you choose the right one for you.

The switching process

Beyond this, you don’t need to lift a finger, as your provider handles the switching process.

You also don’t need to worry about any disruption to your energy supply, as there’s no service stoppage, and you can carry on as normal.

Your switch should be completed within 21 days.

Crucially, when your new supplier asks for meter readings, you should provide these right away, as this will enable your old provider to work out your final bill – and your new supplier to calculate your first bill – helping to ensure you are billed correctly.

You should receive your final bill from your old provider within six weeks of the switch. If you are owed money, you should be refunded promptly.

Tips to help you get a cheaper energy quote

You may be able to get a lower quote if you:

  • Opt to manage your account online
  • Choose to pay by monthly direct debit
  • Opt for a fixed-rate tariff as opposed to a variable-rate tariff
  • Choose a ‘dual fuel’ deal. This is where you get both gas and electricity from the same provider. That said, don’t assume a ‘dual fuel’ tariff will always be cheaper, as on occasion, single tariffs can be the cheaper option, so check these out, too.

Are there any deals that stand out right now?

A great new offer is SO Energy’s Artichoke tariff. It’s a 100% renewable, dual-fuel tariff which costs £845 based on average usage. This is £282 cheaper than the current price cap level – showing that going green doesn’t need to cost the earth. The deal also comes with a £25 bill credit to new customers.

Make use of MoneySuperMarket’s Energy Monitor

Switching can be made even quicker and easier if you sign up to our Energy Monitor alerts when you run a quote. Simply select how much you’d like to save, and we will automatically let you know when there is a deal available with the requested savings.

 

*51% of customers that applied to switch via MoneySuperMarket saved at least £286.50, June 2020.

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