The latest round of steep increases in gas and electricity prices has given an added urgency to the search for attractive deals. Unfortunately for consumers, the situation is changing so rapidly that many of the best fixed-rate offers are being withdrawn. At least seven fixed-rate tariffs have been scrapped in recent times.
Recent energy price announcements have set new records in terms of the increases involved. British Gas, the largest UK energy supplier, is raising gas prices by 35 per cent and electricity by 9 per cent. Earlier EDF Energy had announced a 22 per cent increase in gas prices and a 17 per cent rise for electricity. Other suppliers are expected to follow suit.
Despite the recent fall in the price of oil, which is closely linked to the price for gas, the markets are so volatile that it is difficult to find commentators who expect any significant long-term decline in the foreseeable future. Signing up for a fixed tariff will protect you against any further price increases for the life of the deal. You do run the risk of overpaying in the unlikely event of prices falling but you will have the peace of mind that comes from knowing exactly what your utility bills will be.
One deal recently available, EDF’s Price Protection 2009 was offering to cap annual bills at £1,229 until October 31, 2009, about £100 less than British Gas’s standard dual fuel rate. While a number of suppliers, including E.ON, npower and Scottish Power, have withdrawn their fixed-price deals they may well return with revised offers./ But you can expect these to be less attractive than those previously available.
On the plus side, switching suppliers has never been easier although people are less willing to shop around for their gas and electricity than they are for motor insurance. More than 6m people regularly switch their car insurance but less than half of that number will do the same with their energy supplier, even though their energy bills are likely to be much higher.
Price comparison sites normally require you to input information on your existing energy use and bills and will then calculate whether you are getting a good deal and where you can go for a better one.
Ways of saving on your bill include opting for an on-line tariff, choosing a dual-fuel deal to receive both gas and electricity from the same supplier and paying by monthly direct debit instead of settling each bill as it arrives quarterly. Monthly direct debits do run the risk that you will overpay, tying up cash and, in effect, providing your supplier with a free loan, so keep an eye on any credits or debits building up on your quarterly bill.
An economy 7 tariff means you will pay less for energy that you use at night though it might not be a good idea to use your washing machine or dishwasher then if you live in a small flat or have sensitive neighbours. Energy saving measures such as roof insulation, low-energy light bulbs and not leaving appliances on standby are even more essential in the present volatile energy markets.
By Charles Batchelor