There is little doubt that energy bills are a big drain on your finances, what with the Big Six energy providers hiking their prices recently, with two of them doing it twice within a year! What is one to do? Toe their line or search for the best and cheapest energy tariffs? Of course, you will save a pretty packet if you search for the cheapest energy rates. Find below certain practical tips that will enable you to find the right energy deal and save on money.
Avoid standard variable rate tariff
You need to be careful when your fixed tariff deal ends, for it is then that your energy provider will nudge you towards standard variable rate tariff. Their reason for doing so is simple, that is, to make money. These variable rate tariffs are expensive. According to the figures of previous year obtained from First Utility, will escalate your energy bill by an average of £262 annually. Not only are these variable rate tariffs expensive, but they also provide leeway for your energy supplier to hike costs.
The way out of this is to search for smaller suppliers that offer the best-buy tables and better services. You can do this by manually researching lists of energy suppliers or using online comparison sites. Spending time doing manual research can pay dividends as you can often find deals not apparent on switching sites, however the latter are much faster to use.
Power tip: When using switching sites, always check the box that says something like ‘include plans that require switching directly though the supplier’ as this will reveal even cheaper deals.
Today, the minnows are giving a run for money to the Big Six energy providers. These suppliers offer you a choice of long-term fix and even variable rate that are well under £1,000. Opting for a fixed rate tariff will give you a secure price on each unit of electricity for a set period, whereas variable rate tariff, where the price can fluctuate up and down.
So, to get the full price advantage don’t stick to your original supplier, but switch to a smaller one. It will certainly help in saving cash.
To fix or not to fix
In the past, variable rate tariffs tended to be cheaper, but this trend has changed. Today, the cheapest rates are offered on one-year fixes. Opting for it will save you money. This is because this type fixes the rate you pay for each unit of electricity, usually for a 12- to 18-month period.
The latest trend is to opt for two-year fixed deals. Whether it is one-year or two-year fixed deals, the idea is to avoid expensive variable standard tariffs. It needs to be noted that fixed deals are slightly more than the cheapest deals, if you are going in for long-term security. However, it certainly does not mean that you pay a fixed amount and be done away with it. It will still depend upon the amount of energy consumed, only the tariff per unit is somewhat reduced.
You need to be careful about some fixed deals that charge exit fees if you decide to leave early. Also, there is no guarantee that a fixed deal is the best long-term option, but if you want to give certainty over bills, this is the best choice.
Benefits of energy switching
Your local energy suppliers are the real beneficiary since they tend to charge more for electricity from people living in their vicinity. This is because they build a monopoly in the region and dictate the energy rates.
To break the stranglehold of your local energy supplier, you will do well to explore the possibility of moving away. This switching will certainly save you money. Of course, finding the cheapest supplier will primarily depend upon where you live. A little search will not only help you find cheap suppliers but also help you in comparing prices to find the best price.
If you are scared that switching from your current energy supplier will attract a penalty, if you decide to leave before the term expires, it will still be worth it. So, accept the penalty and you will still end up saving big.
Cutting your energy bills
If you are still in two minds regarding switching to a smaller energy supplier, you can still limit your energy bill in the following ways:
- Ask for return of credited money: If you are paying a set amount by direct debit pay each month for gas and electricity, it will be a good idea to ask for a return of money during summer and spring. You may get it back with interest.
- Save energy: Change the way you use your gas and electricity. This will reduce usage and save money.
- Pay online: This could cut more than £10 off your annual bills.
Switching energy supplier is a big decision. However, if your current supplier is offering cheaper tariff than what you are currently using, it is wise to switch to it, rather than opt for a new energy supplier. You still end up saving money.