Since 1990, when Margaret Thatcher’s government privatised the energy markets, people across Britain have had free choice on who they’d like to provide their gas and electricity. Since then, the market has matured and developed into the highly competitive, volatile battlefield of prices that we know today. Despite, however, there being a huge price disparity between certain suppliers in the UK, large portions of the public are still putting up with sky high prices. This may be because they’re unaware of their ability to switch, or perhaps because they believe it is going to take too much time out of their day to perform the switch. Whatever the reason is, we need to make sure that everyone knows just how quick, easy and beneficial switching your tariff is. Whether you’re a first time switcher or a seasoned money saver, read this article and find out everything that you need to know about switching your tariff.
Is it worth it?
The simple answer is yes. But the real question here is “what is the ‘it’ you’re referring to?”. Switching your energy provider is extremely quick and simple, so there’s not really much ‘it’ to be worth. By spending just 5 minutes on the internet or on the phone, you can provide all the simple information that the comparison engine or energy supplier needs in order to complete the switch themselves. Your part is over after 5 short minutes in contact with your facilitator.
In terms of the actual amount of money that you are going to save, there is no blanket figure. There are many variables that can determine how much you’ll knock off your bill, including your location, when the last time you switched was, which tariff you’re currently on, when you switch and whole bunch of other things. If you’re a first time switcher, it’s likely that you are going to see the most change in your bill compared to those who switch regularly, but the importance is no less. If you are on a British Gas standard tariff in London (as searched 11/08/2017) right now, using 3,500 kWh of electricity and 13,000 kWh of gas per year, then switching to the cheapest current tariff will save you £283.64 per year. This can take as little as 3 minutes for you to complete your part; the switching service/supplier will do the rest.
How long does it take?
According to Ofgem , it can “take up to 21 days (plus a 14 day ‘cooling-off period’) [but] In most cases, it’s around 17 days.” When you choose the company that you want to switch to, you will be contacted to confirm the date that your new supply will commence; however, there will not be any kind of break in service. Although the company that supplies your company is changing, your physical supply will remain exactly the same. Your gas and electricity both travel along a transmission and distribution network that is the same regardless who your supplier is and will arrive at your neighbour’s house just as it will at yours.
What’s the best way to switch?
There are a number of ways to switch your energy supplier, some more popular than others. These include:
- Online comparison engine (e.g. Selectra, USwitch, Money Supermarket)
- Directly through the supplier online
- Telephone sales departments
Increasingly, the most popular switching method on the market is by using a free comparison service. By doing so, you can see the cheapest tariffs available to you on the market and let the comparison service take care of pretty much the whole switching process. By doing this, you are also avoiding biased energy providers or affiliated services that won’t give you a true comparison.
Choosing the right tariff for you
When choosing your energy tariff, there is a couple of things that you need to bear in mind. We all want the cheapest tariff on the market, but there are variables that you need to consider before jumping into a long term deal. Here’s some food for thought:
- Fixed or variable? The price you pay per kWh of energy, whether it be gas or electricity, is subject to huge changes, the majority of which are in the upwards direction. You can take the risk and stay with a variable tariff that will rise and fall with the wholesale price of energy, or you could protect yourself and lock in price for a predetermined amount of time. This can often be cheaper and will allow you to budget more effectively.
- Standing charge. Due to OFGEM regulations, all energy suppliers are required to include a ‘standing charge’ in their tariff pricing structure. This was designed to create a clearer and more transparent price structure for the customer. It is meant to represent the static charges that are imposed on each supplier in different regions of the country; however, many suppliers are manipulating the fine print to suit their interests. Many suppliers provide a 0p standing charge that is technically still legal. In order to recuperate this cost, the price per kWh is extortionately high and will almost always work out more expensive in the average household. However, if you have a seldom occupied second home, this could be a good idea to ensure that you aren’t paying for gas and electricity when you aren’t using the property.
- Renewable or standard. Most energy providers are now providing 100% renewable electricity tariffs, which support the growth and backing of green, alternative energy generation. These can sometimes be more expensive than standard but are much more environmentally friendly, which is a small price to pay for a sustainable future.
- Customer service ratings. The last thing that you want when you encounter an issue with your supply or your bill is to be on the phone for hours going around in circles. For that extra couple of quid you may find that the more expensive company has much higher customer satisfaction ratings, which may not seem important at first, but you’ll thank yourself later down the line when you need to contact your supplier. Do your research!