Why switching energy providers in summer will save you more money

Heater thermostat and radiator in empty room. 3D illustration

Switching apathy is a thing – but you could be missing out (Credits: Getty Images)

The rising cost of energy in recent years means that gas and electricity bills are now a substantial part of most of our household budgets – and it has been very hard to make any savings by switching providers.

The good news, though, is that energy prices have finally dropped and some of us could save money if we choose a different tariff, whether with a current provider or new one.

However, Laura Suter, head of personal finance at DIY investment platform AJ Bell, says Britain’s consumers are gripped with ‘switching apathy’ and unlikely to take advantage of the deals that are out there, despite the opportunity to save.

‘We’re now out of the long period when it wasn’t worth fixing your energy deal,’ she says. ‘It’s worth weighing up what your energy provider is offering you and working out whether it might be cheaper than staying on the energy price cap.’

She warns that weighing up the pros and cons of various tariffs can be tricky. ‘You’ll need to do some digging on what the price cap is likely to do over the next year 
and how much discount your 
energy provider is offering to work out if you’re getting a good deal,’ says Laura.

Here’s how to work out which tariff is right for you – and how to decide whether to switch.

Step 1: Understand your current situation

Check your bill (Credits: Getty Images/Tetra images RF)

The first step in deciding whether to switch is to find a copy of your latest energy bill. Many of us now have paperless bills, but whether it’s online or sent through the post, the bill should contain details of 
your current tariff, as well as 
advice on whether better ones are available for you.

Most of us are on tariffs that match the government’s current energy price cap, although if you’ve signed up for a fixed energy deal 
for a period, you may be above or below it.

The government cap sets a ceiling price for every unit of gas or electricity you use – almost all non-fixed deals are bound by it.

If you’re on a deal based on the price cap, your energy costs should fall by seven per cent on July 1.

If you’re on a fixed deal, your price won’t move down. This may mean it’s cheaper to switch, but there may also be exit penalties if you need to switch from your current deal before the fix ends, so you’ll need to factor these into your calculations.

Step 2: Gaze into
the crystal ball

Think about the future (Credits: Getty Images/iStockphoto)

If you are on a fixed-rate deal set at a level above the price cap and there are no penalties, switching is an obvious decision.

If not, you’ll need to do some calculations to decide whether you will save more by moving to a fixed-rate deal or by staying where you are.

The price cap changes every three …read more

Source:: Metro


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