Here are six tips to help you choose the right energy tariff, at the right time, and pay less for it – so you can get cheaper gas and electricity.
1. Don’t wait for the big six
Standard guidance on money websites is: Wait before switching. If one of the big six energy companies announces a price change, the other five almost always follow within a few months, so you should compare prices then.
It sounds logical, but it doesn’t work. In fact, it costs you money.
I’ve tested it for the past few years, during all the price rises and falls. The energy suppliers don’t change the cheapest online deals along with their other tariffs, when they make their price-change announcements.
The nub is, if one supplier announces price changes and you wait till the others do too, you’ll just spend more while you’re sitting on your existing tariff waiting for cheaper gas and electricity prices to be announced.
2. Switch regularly
The benefits of switching usually start fading within 12-14 months, as your tariff becomes relatively expensive again.
Time your switches to avoid early exit penalties. In addition, some tariffs include annual discounts, which can add more than £100 to quoted savings. Some suppliers will pay you the discount every 12 months as a rebate but, if you leave before receiving your annual discount, they’ll keep it themselves.
Put a note in your calendar for when you’re getting to the end of your discount period. If there’s no discount period or exit penalty, make a note to compare prices again in 12 months to ensure you’re still getting cheaper gas and electricity prices.
3. Avoid bundled deals
Every time I’ve compared deals that bundle different utilities together, such as broadband and energy, I’ve not been impressed with the results.
With bundled deals, the only way to get the prices down to something close to what you might call cheap is to win referral fees from the supplier. To do this, you have to get your friends and others to sign up. You don’t want to drag your friends into this sort of pyramid scheme.
4. Consider the full package
Some suppliers make a big deal of cashback and loyalty points, but a lot of the time the cheapest deals don’t have either.
Make sure you compare the overall price, not just the gimmicks.
5. Reputation is all relative
Some websites help you compare the quality of service, but it’s all relative. Pretty much all of the major suppliers have large numbers of dissatisfied customers.
Really, there’s just one gas and electricity company that I’ve noticed that stands out above the rest in customer feedback online, and that’s Ovo Energy.
This small supplier offers just two tariffs, both of them are fixed and one of them is 100% green. It also pays you interest when you’re in credit.
Since it was founded three years ago, it has frequently been one of the cheapest suppliers, but compare prices to ensure it’s competitive for you.
6. Know your tariff
When using comparison sites to find cheaper gas and electricity prices, they’re much more accurate if you look up the name of your tariff. By entering this information, many comparison sites can more precisely estimate the savings you could make.
To be even more accurate, you should look at your bills to see the kilowatt hours (kWh) you have used over the previous 12 months.