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Felicity King-Evans: In the last few months an energy price war has broken out in the UK – but only for customers who are willing to go online.
Three of the big six cut their the prices in a row, as they all tried to position themselves as the cheapest energy provider ahead of the winter weather.
Then two new energy sellers came from nowhere and undercut the rest of the market, prompting a further flurry of price cuts.
So if you’re languishing on your provider’s standard tariff, you could be as much as £240 a year better off by going to one of the market-leading online deals.
Back in July, British Gas was offering the cheapest tariff, with an average bill of £1,018 pounds a year. Following the spate of cuts, the provider with the lowest cost is now First Utility, with an average bill of just £954 a year under its iSave tariff.
But whichever provider you’re with, there are some considerable savings to be made by moving online.
With energy bills getting higher, and the weather getting colder, it’s time for people to do all they can to bring down the cost of their energy. So I asked Scott Byrom – that’s moneysupermarkets very own energy expert - why it is that online tariffs are so much cheaper.
FKE: So Scott why are all the cheapest tariffs online?
Scott Byrom: Well the cheapest tariffs have always been – well for the last number of years – online deals, simply because it makes life a lot easier for the energy providers, likewise it does for the customers. Because it’s an online account the supplier has got a lot less responsibility in terms of managing that account and sending out bills. With it all done online its just a lot easier all round really.
FKE: And what are the main benefits to the consumer for having an online deal?
SB: You have got the suppliers point of view, less administration, they can pass on lower costs. But, the biggest one for the customer is that they can enter actual meter readings really easily – and I actually did do this yesterday! You go to the side of the house where you have got your little meter readings, you log onto your online account - nice and secure, username and password - and then just key in your figures there.
Whatever the meter reading are currently at, just make sure that all your bill are 100% accurate. You’ll get a little reminder maybe an email or txt message after 90 days and the energy provider will ask you to just provide you with an actual meter reading.
If you don’t within the 90 days they will take an estimate which will be based on previous consumption but you can just update it at any time and it should refresh your system, and it will just make sure that if you are in credit you can obviously claim that back or if you are in debt you can do something about your direct debits and get those amended.
FKE: So, the key thing is there are no nasty surprises up ahead; you’re not relying on estimates?
SB: Yes, exactly. The biggest one really for leaving it to estimated bills is that there is always room for error there.
If you’re a family of four, mum and dad and two kids, consumption has been x for a number of years, your energy supplier would go on that as a trend, and it will estimate your bill accordingly. If the two children went off to university and energy consumption dropped significantly the energy supplier doesn’t know that, so that will continue to bill you at what it has been previously. So, again more reasons to make sure that you are providing actual meter readings as often as you can.
FKE: OK and the thing that we all really want to know is: How like do you think it is that we are going to have further price cuts before the winter weather sets in?
SB: I haven’t got a crystal ball, but what I can say it that we are seeing cuts in, again, the online prices. We haven’t seen them across the board for the standard deals since March this year.
Whether it will happen this year, it is too difficult to say, anything could happen. We had issues the other year with Russia and Ukraine and obviously the impact that that has.
We would like to think that the energy suppliers will pass on price reductions - there are certainly indications that they should do or they could do - but again it’s up to them, its up to the energy suppliers themselves or whether Ofgem and the Government can apply any pressure, who knows?
But rather then sitting around waiting for that. I would definitely advise each person as an individual to take control of their accounts and to make the biggest savings, which will be bigger then any price reductions you are willing to see.
FKE: Don’t forget, if you’ve got any questions at all about your energy bills, you can put them to the moneysupermarket.com forum on our website. Thanks for watching, see you next time.