Advance Payment Energy Plans – Why and Why not?

Advanced energy plans are ones in which you pay for your energy bill in advance and get a discount in return. These plans offer guaranteed discount and are offered on standard rates. This option is offered by few providers and not all. If the suppliers raise the prices then there is increase in your payment and also in the discount offered. Most of the suppliers use this method to buy wholesale energy in advance. As they know how much energy they face they offer this energy at a high discount.

Most of the time the discount is 5% of the total energy used and if you pay any excess money then it remains as a credit with the supplier. This method has two basic advantages – firstly, you know how much to invest in energy and so can plan your monthly budget. Second, you get a guaranteed discount which in most cases reduces your bill by the amount you would have paid for standard rates. This way, it saves money on your energy bills.

Along with the advantages there are a couple of flaws in advanced payment energy plans. Yes! It gives you discount but as it is on the standard rate, the amount will always vary. The higher the standard rate the more the discount but it may not be the cheapest energy deal for you. Another issue with advanced payment plans is that most of the suppliers does not have the policy to reimburse your credit if you switch to another supplier. To avoid this, you need to ask your supplier much in advance about the actual policy and how your money would be managed.

Last thing to keep in mind is that when your plan is over, you will be automatically switched to the standard plan offered by the energy supplier. This can be without notice and you may end up paying heavily as most standard plans are expensive. It is always advisable to switch to another supplier who offers a lower rate on standard plans.

Want to know which companies offer advanced payment energy plans? Then, go through our website freepricecompare.com or call us on 02034757476.

Written by

Shay Ramani

Founder and Managing Director at Free Price Compare

Expert in Cost Saving and Financial Solutions