We would all like to pay less for gas and electricity, which can mean changing your supplier, but with so many different suppliers and tariffs it can be difficult to know where to start.
If you want to change supplier, reduce your energy bills or if you are organising your home’s gas and electricity for the first time then read our handy guide to ensure that you make the best choice:
Most households spend a large proportion of their budget on energy bills, but most don’t really know exactly what they are paying for. However, Asda Finance recently uncovered that 82% of UK households feel that energy bills need to fall by an average of £39 a month (£468 a year) in order for them to be deemed affordable.
To be really energy smart, you need to understand your bill and get a better idea of what you’re spending and how you can make savings.
Your energy usage is calculated in kilowatt hours (kW/h). Your electricity meter will show the number of kW/h you are using, whereas your gas meter will show your usage in cubic feet or cubic metres and the gas company will then convert this into kW/h.
If you don’t have a standing charge then you’re likely to pay for your energy using a two-tier system. This means you’ll pay more for the first units of energy you use.
Most energy suppliers will charge a fixed daily fee when you connect to their energy supply and you’ll also pay for the units of energy you use. In general, companies that don’t require a daily fixed fee will charge more per unit of energy.
If you have both gas and electricity within your home then a dual fuel plan can save you money. Many energy companies will offer a discount if you get your gas and your electricity from them. It can also make the process of paying bills less complicated.
There are lots of different price plans available, so you’re able to choose the one that suits your specific needs. The most widely used price plans are:
Standard Plan - When you’re organising your energy supply, if you don’t choose a price plan option you’ll automatically be placed on a standard price plan. This means that your prices will be calculated in line with the current energy costs, so if prices rise, you’ll pay more.
Fixed Price - If you choose a fixed price plan you’ll pay the same amount each month, whether prices rise or fall. This means you’ll save money when prices are high, but if they drop you could lose out.
Fixed price plans normally last for a year and if you don’t request renewal you’ll be automatically put back on a standard price plan. When you choose a fixed price plan you’ll sign a contract, so if you want to change supplier before the plan finishes you may be charged to leave.
Capped Price Plan - When you choose a capped price plan the amount you pay for energy bills can vary, but is capped at a specified amount. This type of plan can offer more flexibility because you won’t pay more than the cap but you could make savings if prices drop.
Economy 7 - In a similar way to phones, you’re charged more for using energy at peak times and less for off-peak times, such as during the night. An Economy 7 plan can help you save money when using energy at night, but it’s only effective if you use at least 20% of your energy between 1am and 8am.
Green Energy Plan - Green energy plans work by offsetting your carbon footprint by using a proportion of the money you pay for energy to fund eco projects. This can be things like reforestation or funding research into renewable energy.
The name of a green energy plan suggests that renewable resources will be used to create the energy you use, but this is not the case. Some companies will take a proportion of their energy from renewable resources, but there is no legal obligation at present for companies to offer renewable energy on green tariffs.
Online Energy Plans - Most energy companies will offer discounts to customers who buy online and further savings can be made if you manage your account online too. This is because online purchases and accounts are quicker, easier and cheaper for energy companies to process so they can charge you less.
However, if you choose to pay for your energy via direct debit, it may be prudent to be aware that your direct debit will be a fixed price but your energy bills can rise, meaning you can end up owing your energy company money.
Reading your meter
It’s very important to read your meter regularly and let your energy company know what your readings are. If you don’t provide meter readings then your usage will be estimated, meaning you can end up paying more than you should be. Conversely, if you’re paying too little you will be running up a debt to your energy company.
Choosing a plan
When you know the different plans and options available, you can make a more informed choice about the company and tariff you choose. Make sure you shop around for quotes to find the best deal and if in any doubt about what you’re paying for then contact your company who should be able to explain your bill in more detail.Back to top