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Cut your fuel bills

Martyn Hocking (Editor - Which? Money)
22/ 9/2008

GAS and electricity bills went up by a massive 62 per cent between 2003 and 2007 - that's 15 per cent a year, on average.

And worse is on its way, with prices heading steeply up again by the end of the year.

The good news is that many of us can still make big savings by shopping around and taking simple steps to reduce our energy consumption.

SWITCH FOR SAVINGS

A third of Which? members have switched gas or electricity suppliers in the past two years to save money.

But even more - 43 per cent - told us in a survey that they had thought about it and decided not to bother, with around half of this group thinking that they wouldn't save any money.

If you've been put off by gloomy headlines or bamboozled by economists talking earnestly on television and radio about the impact of China on energy prices, think again. For lots of us, there are definite savings to be made.

Start online

Our website, www.switchwithwhich.co.uk, is a great place to start.

It allows you to search the entire market for suitable tariffs, and also lets you home in on green or capped tariffs if you particularly want these, as well as checking customer service ratings for each supplier.

Our research shows that users of the site in the last six months of 2007 saved an average of £233 a year when they switched suppliers, but you could save even more.

When we compared prices offered by different suppliers, we found that:

>  All of the cheapest deals were online dual-fuel tariffs, paid by monthly direct debit.

>  If you're paying quarterly, buying your power from separate suppliers, and receiving paper bills, then you're probably paying too much at present.

Changing tariff

We compared the costs of gas and electricity for a sample family. This family uses 10,000 kWh of both gas and electricity and currently buys it using British Gas's discounted gas and discounted electricity tariffs, paying quarterly by cheque. Their annual bill is between £1,500 and £1,600.

You may not even need to switch to a new supplier to slash your bills.

When we checked prices, the cheapest deal wouldn't involve our family switching suppliers at all, but rather shifting to British Gas's online Click Energy 5 Dual Fuel tariff. Just changing tariff and paying by monthly direct debit would save our sample family almost £347.

For those who don't trust direct debits, the Click Energy tariff can also be paid by cash or cheque. In our case, this would cost an extra £55.

If you can't, or don't want to, run your account online, there are still savings to be made. In our example, Scottish Power's Standard Dual Fuel would have saved £244, paying by monthly direct debit.

And even if our family avoided the internet and direct debits altogether, they could have saved more than £80 by choosing Eon's Energy Plan Dual Fuel tariff.

Capped deals

If you are worried about prices continuing to rise, most suppliers offer fixed or capped price deals.

These are typically 10 or 15 per cent more expensive than their conventional tariffs, but have been attractive over the past few years, with strongly rising prices meaning that those who opted to fix one year have reaped the benefits later.

Unfortunately, it's impossible to analyse with any certainty whether you will save money until the whole deal has ended, and it's not always been true that customers have benefited.

Had you taken Scottish Power's 2004 fixed price deal, you would have saved money against the subsequent average tariff, but taking its 2005 offer would have proved more expensive.

HOW TO SWITCH

Once you've decided to switch suppliers, the process itself is very simple. As your power comes off the National Grid, it's only a matter of setting up an account with your chosen new supplier.

If you've used Switch with Which?, you can start the process through the site:

1 - You'll need to supply the details of your old supplier, your address, and, if you'll be paying by direct debit or credit card, your bank details as well.

2 - Once this is done, the new supplier will contact your old one and agree a switching date.

3 - On the nominated date, you will need to take a meter reading, which will be used to settle your final bill with your old supplier, and you'll then, of course, need to settle that bill.

4 - Don't forget to cancel any existing direct debits with your old supplier.