Having hit us all for six with price rise after price rise, energy suppliers are now fighting for the title of cheapest deal resulting in a spate of price cuts. Average household energy bills had rocketed to £1,000 a year but now they’re heading down.
For many of us this probably sounds too good to be true, and for others it’ll be too late because you’ll have fixed your tariff or already switched.
So with energy prices going up one minute and down the next, when will the confusion end and how can you get the best value deal? MoneyExpert.com takes you through the options…
Yo-yo prices show their good side
Energy bills now take a much larger slice of our household income than they used to. Many people took a chance last year and fixed their energy tariffs to avoid being hit with even higher prices, while many others switched supplier – around four million of us in the past year, in fact.
But now things are different. British Gas recently announced a price drop on its standard tariff, and Powergen reacted quickly by guaranteeing to beat British Gas’ deal for the next 18 months.
As competition hots up, you should be the one who benefits. For example, if you take on the Powergen deal, the Powergen Electricity Guarantee, Gas Guarantee and Energy Guarantee (for dual fuel), your bills will be £8, £6 and £27 cheaper respectively, than British Gas standard tariffs – if you pay every quarter.
All this means that your average bill should decrease if you sign up to the right deal. Check MoneyExpert.com to work out your average bill.
But I’m on a fixed deal
If you’ve already reacted to rising prices and fixed your tariff, you’ll at least have the peace of mind of knowing exactly how much you’ll pay each month. Unfortunately if you see a better rate available now, you won’t be able to take advantage of it until your contract expires with your current provider. If you’re nearing the end of a fixed deal, make sure you check prices again when you are free to move – prices change quickly so you don’t want to miss out.
But I’ve already switched once
Don’t panic! There’s nothing to stop you from switching again, but wait to see how the market develops. Switching quickly isn’t always the best option when prices are going down, as providers tend to try and out-do each other. See what happens, then don’t be afraid to switch again if your supplier isn’t up to scratch.
But I don’t want to move and the customer service is great
Don’t underestimate good customer service – but make sure you’re not paying over the odds for it. Have a look at what else is on offer and see what you make of other companies. There are huge savings to be made – you may be showing your supplier some loyalty, but they certainly didn’t show you any when they hiked prices – so don’t be shy.
What about saving the planet?
Some suppliers offer "green" tariffs, where the prices are based on energy that was produced from renewable sources, such as wind or hydroelectric power. The supplier will put an amount of renewable energy into the National Grid that is equivalent to what you consume, although the energy you consume will probably come from a conventional source. The MoneyExpert.com gas and electricity service includes the option to take a "green" tariff.
Whatever state your energy bills are in, price wars are always good for you. Experts predict that the price cuts from British Gas and Powergen alone will mean Brits have saved £2.05 billion. The price just might be right for a change.