Charity Age Concern is calling for £50 million worth of rebates for old age pensioners suffering from fuel poverty ahead of next winter as gas and electricity prices race away.
With some experts predicting that dual fuel bills will shoot from £1,048 to £1,467 by the end of the year all of us need to be thinking about our energy supplier and the tariff we’ve chosen.
Understand your tariff options
There are a least a dozen options when it comes to energy tariffs and unless you know the lingo you could end up buying something that’s poorly suited to your needs. There are the basic tariffs such as single fuel or duel fuel which are fairly self explanatory in that a dual fuel tariff will provide both your gas and electricity while a single fuel tariff will provide one or the other.
Then there are tariffs such as economy 7, market tracker and mix and match which require a little explanation.
An economy 7 tariff means you pay a higher rate for your energy during the day and cheaper rate at night. This will allow you to make savings if you use energy for things like your washing machine at night.
Market trackers are linked to the wholesale market, meaning the price you pay for your energy is linked directly to the cost of oil and gas. Given the continued inflation of oil prices now could be a bad time to opt for this type of tariff.
Mix and match tariffs are those which allow you to combine elements of different tariffs. You might for example have an economy 7 tariff which you also combine with an online tariff.
Lookout for innovations
At the end of the day if levels of service are the same then what most of us look out for is the cheapest possible deal. There’s no silver bullet when it comes to choosing a supplier but it can pay to watch out for the latest product innovations.
British Gas has for example just launched an online pre-pay tariff which they claim will save the average customer as much as six per cent on their bills. This combines two elements which traditionally reduce cost.
Online tariffs generally work out cheaper as there’s very little paperwork involved. Combine this with a pre-pay element which can lower your bill by giving you a clear idea of what you’re spending.
Benefit by debit
When it comes to financial product such as insurance paying by direct debit can add to your cost as providers like their money for your cover up front. Using direct debit to pay for your energy bills on the other hand can reduce the costs significantly. British Gas for example offers a £76 discount with their Click Energy tariff to customers who pay their gas and electricity bills by direct debit.
Time to switch
The only way to be sure that you’re using the cheapest tariff is to compare the market and see what you’re quoted. According to MoneyExpert’s own research as a nation we’re not great at getting the best deal when it comes to comparing and switching energy providers.
More than six million of us switch car insurance regularly but less than half that number takes the time to switch energy providers even when energy bills cost around three times more than the average car insurance policy. It’s time to drive a harder bargain on your energy.