Energy bill gone down? See how to shave hundreds more off
There has been a buzz around some energy providers dropping their prices recently. But although this may put some money back into your pocket, there is a better way to make sure you're getting the best deal possible for you.
Scottish Power, SSE and E.ON have all cut, or announced plans to cut gas prices on their standard tariffs by just over 5%. Despite this many industry experts are unimpressed with the reductions, which will save the average home just £30 a year.
The truth is, that despite the cuts, picking a fixed price energy plan is usually a much cheaper option. According to energy regulator Ofgem, switching from a standard to a fixed plan could save you close to £200 per year.%VIRTUAL-ArticleSidebar-bills-guide%
Variable vs. fixed price energy tariffs
There are two types of energy tariff available: variable (also known as standard) and fixed.
Sign up to a fixed energy tariff and you'll pay the same rates for the duration of the contract. That means that if you pick a one year deal, during that time the price you pay for energy units won't change. However, that doesn't mean your bill will stay the same no matter how much energy you use!
Standard, or variable tariffs, don't have fixed unit rates. You'll pay whatever your energy supplier has worked out as the market price. That means the unit price will rise and fall, in line with international energy markets. These plans usually work out much more expensive than the cheapest fixed price deals.
One of the reasons the recent price cuts have failed to impress is that they are far from matching some of the most competitive fixed price deals on the market.
So how much will switching save me?
It's easy to find out how much you can save by switching energy provider.
The first step is to grab a recent energy bill and pick a few price comparison websites. It's important that you use more than one, because they don't all show the same deals.
Once you're on a price comparison site, type in your details and run a price comparison. You should then be shown a list of energy plans available and given an estimate of how much you might save.
Once you've chosen a new plan, your new supplier will do most of the leg work. They'll contact your old supplier and keep you up to date with the process. It shouldn't take more than 17 days and you have 14 days to change your mind and cancel the switch.
Take 20 minutes to see if you could save £200 by switchichig
This article is provided by the Money Advice Service.
