The prices in the electricity market are constantly moving, so to see if you are getting the cheapest deal available in the market you should check periodically (it takes less than 5 minutes). For those who haven’t switched for a couple of years, it is with great certainty that you are on the supplier’s most expensive tariff.
Overall energy prices are going up but competition remains stiff from the likes of the smaller energy suppliers such as OVO, Extra Energy and First Utility. This year, all of the ‘Big Six’ (British Gas, E.on, EDF Energy, nPower, Scottish Power and SSE) suppliers have already increased prices.
Given the above reasons, now is very much the best time to compare and switch to a cheaper energy supplier.
Electricity suppliers purchase wholesale energy and distribute it to individual homes for a profit. Hence when wholesale energy prices go up, so does the prices we pay.
Ultimately factors such as economic, political and supply woes lead to the increase in wholesale energy prices.
Standard Variable Tariff – This tariff is typically the suppliers most expensive
Fixed deal – In a fixed deal tariff your energy prices are locked for a predetermined period of time, typically 1 or 2 years. So if the energy prices go up or down, you will not be affected allowing you to keep a better handle on your household budget
Dual Fuel – Dual fuel tariffs are offered to customers who opt for the energy supplier’s electricity as well as gas services. Typically dual fuel tariffs come with discounts which can be around 15% or more but that’s not to say, they are the cheapest option in the market. In some cases it is cheaper to have separate suppliers for your energy needs.
Economy 7 – With an Economy 7 meter, you get cheaper electricity for 7 hours a day. Typically the 7 hour time period is between 10pm and 9am. It is worth noting that the day rate is usually higher than on other standard tariffs but you do tend to make a significant saving if you are able to utilise the energy during the 7 hour night period.
Paperless billing – Many suppliers give cheaper deals if you choose to be environmentally friendly by managing your account online.
Cash, cheque or direct debit – By paying by direct debit you can get around a 4% discount as energy companies charge more for using cash or cheque.
Cancellation fee – Some fixed rate deals have exit/cancellation fees should you wish to switch suppliers. Typically the cancellation fee is £25 to £30 per fuel.
Smart meters – The government passed a legislation to have each home in the UK to be fitted with smart meters by 2020. Smart meters are clever little devices which submit your meter reading automatically to the energy suppliers and they allow you to monitor your energy usage real time.