Martin Lewis of MoneySavingExpert: This is how you can save £200 on your energy bills
PUBLISHED: 15:00 22 September 2018 | UPDATED: 14:09 24 September 2018
Brace yourself: energy bills are about to be hit by a double whammy.
The big firms are all putting their prices up (again) and many of the cheapest deals you can switch to have been pulled.
So let me be plain: now is the time to switch before winter, and every week’s delay risks you paying more.
And if you’re on a standard tariff (ie the hideously expensive one most people are on) then as with typical bills you’re overpaying by £360 a year, so if you don’t act you’re ripping yourself off.
The energy price hikes
All the big six providers have put up prices this year, and now we’ve had a second round from four of them – which are due to hit your next bills.
For example, British Gas first hiked its prices on May 29, and the second rise is due on October 1 which will see the price on typical usage after increases at £1,205. As for the two who haven’t done it a second time, that could still come.
Compare them to the cheapest deals on the market and you’ll see huge savings. Yet speed is of the essence.
With wholesale prices (the prices energy companies pay for energy) rising, many cheap deals are ending and being replaced by more expensive ones.
The cheapest one-year fix at the beginning of August was £867/yr, today the cheapest fix deal is £978– a rise of more than £111 a year in the past month alone. And for the moment this trend looks likely to continue, so the quicker you sort it out the better.
Don’t wait for the price cap
The regulator Ofgem has said it will introduce a price cap on standard prices by the end of December.
For someone who uses a typical amount of energy it will be £1,136/year fixed for six months. That will mean those on big six standard tariffs will see a reduction.
While Ofgem calls this a ‘fair’ price, that doesn’t mean it is a ‘good’ price – the danger is people will get the false sense of security that they’re on a good deal – whereas you can lock in a fixed deal for a year at up to 20% cheaper.
How to find your cheapest deal
Whatever your energy set up, whether it’s direct debit or prepay, electricity only or dual fuel, there’s no one winner - as your cheapest depends on where you live and what you use. Therefore, the answer quite simply is to use a comparison site.
But beware, as comparison sites are now allowed to only show you tariffs that pay them. As many of the big ones do this, you may not see all the deals.
There’s a full list of comparison sites at www.ofgem.gov.uk or you can use my www.cheapenergyclub.com which includes all the market’s deals by default (and it also gives you £25 dual fuel cashback if you switch).
I’ve never heard of the cheapest one
If you’re put off by the fact your winners are names you don’t know – don’t be.
Simply scroll down to one you do know – or one with a good customer service rating.
You don’t have to go for the very cheapest – go for one you’re happy with.
Don’t think switching is complicated. It’s not. It only takes minutes to find your cheapest deal and then it’s switched over in 17 days.
It’s the same pipes, gas, meter, safety – you don’t lose supply – the only difference is price and customer service.
And there’s no break in supply when you do switch.
British Gas customers get £200/year off - but only if you ask for it.
Some 3.5 million homes are on British Gas’s standard tariff.
If you’re loyal and want to stick with British Gas, it’s launched a new dual fuel, direct debit tariff (ie where you get both gas and electricity from it) called ‘Energy Plus Boiler Cover Oct 19’, available for both new and existing British Gas customers who apply online (or, better, via a comparison site to see exactly what it’ll cost).
On average it’s £1,020/year (though it depends on your region) and the price is fixed for a year, so it won’t rise in October – meaning a typical saving of £185/year, plus it also includes British Gas Boiler Insurance for no extra cost, as you’d normally pay £50ish for that it takes the saving to over £200.
• Martin Lewis is the founder and chairman of MoneySavingExpert.com