1. What's happening to prices?
The papers are dripping with sources saying British Gas plans to announce an 8%+ hike after the party conferences, but before its November financial results.
If they're right, it's likely we'll see a raft of energy hikes before winter, as like sheep, when one big six energy firm moves, others will follow.
Over the long run, the consensus is energy prices are only going up in one direction, and some predict hikes of 30-40% over the next few years.
2. Switching's no biggie (except for the savings)
Switch, and you keep the same gas, electricity and pipes. Only service and, crucially, cost changes. There are two choices of tariff.
A variable, where prices can rise, and a fixed where they don't. Variables can be cheapest - if you've never switched before, the best of them will save you large even if they then hike prices by 10%.
But if you want certainty, for not much more, you can lock into a fixed deal that guarantees no price hikes.
3. You can lock in for up to FOUR winters of no price hikes
Many on standard tariffs can save and get no-price hike certainty with a cheap fix. But don't just call your provider and ask to be put onto its fix, as that risks locking in at high cost.
Your winner and saving depends on usage and location. Use an Ofgem-approved comparison site to find the cheapest deal for you.
Here are the top fixed deals for the average dual fuel user (not pre-pay) below.
Be warned that these top fixes could end any time. Firms use them to grab market share. Once they hit quotas, they're withdrawn, and I've heard rumours the cheap M&S fix will be pulled for new customers soon.
- Npower's Price Protector March 2017 - fixed until 31 March 2017, no exit fee - costs £1,340/year.
- Npower's Online Price Fix November 2014 - fixed until 30 November 2014, no exit fee - costs £1,180/year.
- First Utility's iSave Fixed v9 April 2015 - fixed until 30 April 2015, £30/fuel exit fee - costs £1,170/year.
- M&S's Fix & Save - fixed until 30 September 2014, £50 exit fee (same fee for single fuel or dual fuel customers) - costs £1,140/year.
These compare to a standard tariff, which would cost the average dual fuel user £1,420/year, and the cheapest variable tariff (subject to price rises) at £1,120/year.
The five key fixing rules:
- ALWAYS do a comparison: Who's your winner, and how much you can save depends on your usage and region. Therefore don't just rely on the tariffs above - you should do a comparison. You can see a full list of comparison services on the Ofgem Confidence Code comparison page or to see your exact prices for the tariffs above, use Martin's Cheap Energy Club top fixed tariffs comparison tool.
For people who aren't online (you can tell them this) there are a number of comparison sites with phone services.
Energyhelpline is on 0800 074 0745, Energylinx is 01259 22 00 00, 0800 849 7077 or 0845 225 2840, and uSwitch is on 0800 051 5493.
- No exit penalties give certainty and flexibility. Usefully, the two Npower tariffs above have no early exit fees, so if things don't go as predicted, you can leave for free.
- Is it worth fixing? If it shows you can save and get certainty, it's a no-brainer. As some predict 30%-40% rises over the next few years, longer fixes are attractive for those wanting to switch then forget about it. Though shorter deals would win if price hikes aren't so sharp.
- You could be due a lump sum. If you're in credit when you switch, your old provider needs to give you the cash (put it aside, winter's coming so usage is higher). If you're in debt to the tune of £100+, it'll usually want the cash. If less, you may be able to carry it over to your new account. (If you're on a pre-payment meter, you can switch tariff if you have less than £500 of debt).
- You can take your fix if you move. Usually fixes are portable, all the above are.
3. Paying by monthly direct debit is up to 6% cheaper
If possible, pay by fixed MONTHLY direct debit and you get a discount - though always do regular meter readings for accuracy, as your bill is estimated.
4. Your direct debit can rise,even if your price drops
Direct debits are based on an estimate of your usage. So some find they switch to a cheaper tariff, but their direct debit rises.
This is usually because the new firm over-estimates, or the old one under-estimated (in which case you were probably in debt when you left). If it's too high and means you overpay, you'll get the money back later. If it's a problem, ask them to lower it, you've fair energy direct debit rights under regulator Ofgem rules.
5. Prepaid (key or card) energy meter? You can switch and save
Don't assume you're locked to your provider. While some of the more competitive deals aren't available, it's still possible to save up to £150 a year.
Do a comparison at an Ofcom-approved comparison site such as Energyhelpline or uSwitch.
Also consider checking if you can move off prepay to a normal billed meter for free.
6. And lastly, don't walk around in your knickers
It's not just cutting the rate, using less energy cuts bills too. It's amazing how many pay heftily to chunk up the thermostat while barely dressed - so change your instincts. Wear a jumper and consider things like:
- Applying for £1,000s worth of insulation and boilers: The big energy providers are giving free boilers, plus loft and cavity wall insulation, to some who get child tax credit and have an income of £15,860 or less or are receiving certain benefits such as pension credit. All of the big six energy providers have schemes in place so check their websites, or give them a ring for more details and to apply. A quick way to check beforehand if you qualify is to call the Energy Saving Advice Service and answer a few basic questions. It's on 0300 123 1234 (England), 0800 512 012 (Wales) or 0808 808 22 82 (Scotland).
- The Green Deal: This is a Government initiative that allows you to pay for energy efficiency house upgrades, like underfloor heating and double glazing, from the savings made on energy bills. It is a good system but slightly complex to execute. See the Government's Green Deal info for full details.