It’s that time of year when freezing temperatures have all of us turning on the central heating more often than usual. But as the temperatures drop, the amount we spend on energy can rocket.
At the start of February, Npower - one of the UK’s ‘Big Six’ energy providers - announced one of the biggest price rises in years. It is increasing standard tariff electricity prices by 15% from 16 March, while standard gas prices will rise 4.8%, adding around £109 to a typical dual fuel (both gas and electricity) annual bill.
Over the last few years, we have seen that when one provider announces a price rise, the rest of the big players - and some of the smaller providers too - will then follow suit.
But don’t fret - while the suppliers are announcing price rises, if you act now you can cut your future bills, no matter what kind of energy customer you are*.
Standard variable rate tariffs
If you haven’t switched energy in the last few years - or have never switched – you’re far from alone. According to energy regulator Ofgem, around two-thirds of households in the UK are currently on a standard variable rate (SVR) tariff.
These tariffs are almost always more expensive that the main alternative – a fixed rate tariff, where the price per unit of energy used is fixed for a stated period.
And these SVR tariffs are the ones that will see the price rises that are coming down the track in the next couple of months. So if you have an SVR, you’re already on an uncompetitive deal, and you’re about to pay even more for the privilege.
That makes it important to consider switching to a fixed tarrif. You can find a list of competitive deals if you enter a few basic details (have a recent bill handy if possible – but that’s not essential). You can then complete a switch request in a matter of minutes, and be on supply with your new provider within three weeks.
There’ll be no interruption to supply, and there’s no need for any work at your property, inside or out.
By going for a longer fixed term deal – for 24 months, or even longer – you can lock in the price you pay for the next couple of winters, meaning you sidestep any price rises coming next year as well as this.
You can also call us if you want advice or assistance in making your switch: you can reach us on 0800 177 7087 between 9am – 8pm Monday to Thursday, 9am – 5:30pm on Friday, and 10am – 2:00pm on Saturday.
If you’re on a fixed tariff
Signing up to a fixed tariff is a smart way to cut your energy bills. But don’t rest on your laurels - you need to shop around again before your deal comes to an end to ensure you don’t slip onto the standard rate, and see your energy bill spike as a result.
Every month a host of fixed tariffs come to an end - in March for example tariffs from Better Energy, Co-operative Energy, EDF, first:utility, Flow Energy, M&S Energy, npower, Sainsbury’s Energy and SSE will all be concluding.
You can find details of the fixed tariffs coming to an end in the next few months here.
When should you start your search? If you try to switch too early, there may be exit fees to pay, and they can be pretty significant - as much as £50 per fuel in some cases.
However, fees don’t apply within six weeks of the tariff ending, so that’s a good time to start shopping around and secure yourself an even better deal.
If you don’t, you may see your annual energy bill jump by hundreds of pounds as you slip onto the standard tariff, while you’ll also be vulnerable to the next round of price hikes.
If you’re on a prepayment meter
People on prepayment meters generally pay more for their energy than others.
In fact, Ofgem has this week announced a new price cap on what prepayment customers will have to pay. It comes into force from April 2017, and is predicted to save millions of people around £70 - £80 a year.
There are other things you can do to save on your energy bills too, without relying on the price cap.
All of the ‘Big Six’ suppliers - British Gas, EDF, E.ON, npower, Scottish Power and SSE - allow you to switch to a credit meter without charge, while some smaller suppliers will do the same.
This will then allow you to move to one of the many competitive fixed tariffs on offer, saving you cash in the process.
Bear in mind this will involve a credit check, and repaying any money you still owe the supplier. And remember to shop around, rather than simply sticking with your existing provider - switching may mean further savings.
Even if you can’t move to a credit meter, you can shop around and potentially switch to a more competitive prepayment meter tariff. Be sure to compare deals on the MoneySuperMarket energy channel to see which deals are best for you.
And remember if you are renting to get your landlord’s permission before trying to switch your meter deal.
*10% of customers could save up to £670. MoneySuperMarket Data, May 2016