With household budgets currently feeling the squeeze, it makes sense to make savings wherever you can. Cutting down on your energy consumption is a good way to save money and to lower your carbon footprint at the same time. You may also be able to greatly slash your bills by changing your energy supplier.
In the UK we've been free to switch energy suppliers since competition rules were introduced in 1999. The process can be much easier and quicker than many people think and you could start saving money on your gas and electricity bills right away. Energy regulator Ofgem has said that customers who don't shop around for their energy could end up paying at least £100 a year more than they need to.
Do your own research
It can be difficult to come to the right decision when being given a hard sell and without access to all the relevant information. By taking the time to look into different deals yourself you can come to the right decision and hopefully find a tariff that will genuinely save you money.
Price comparison websites
You can use a price comparison website, such as Asda Energy Compare and Save, to compare all energy suppliers. Before making a switch, check if your existing tariff requires a cancellation fee. If it does you will have to pay this along with your final bill or wait until your tariff period comes to an end.
Many consumers can feel overwhelmed by the process of calculating an energy bill and choosing the right supplier, and may wish to discuss the situation with an expert. Calling the Asda Energy Compare and Save call centre could be the answer.
Find out your usage
There are many different tariffs available. Deciding which one is right for you might depend on how much gas and electricity you use on a daily basis.
Consumption can vary greatly depending on the time of year and other factors. If you've recently had your home insulated, for example, or changed from a gas to an electric cooker, this can have a bearing on your recent energy usage. Look at your usage over an entire year or even more if you've kept the bills or have access to your records online. Bills with actual readings will give you a more accurate picture than estimates. Alternatively, you can easily obtain your annual usage from your energy supplier.
What tariffs are available?
Standard: This is generally the most expensive option available, and most suppliers will have their own specific one.
Online/paperless billing: These are generally the cheapest tariffs available on the market. You will receive your bills online rather than a paper bill. You will also manage your account online, e.g. provide accurate meter readings making sure you pay for what you use (no estimated bills). You can still call your supplier should you need to.
Discounted: Energy suppliers will sometimes offer discounted tariffs to acquire you as a customer. These are generally a few percentage points cheaper than a supplier’s standard tariff.
Fixed: Fixed price tariffs may be more expensive than other tariffs in general, but they are guaranteed not to increase or decrease during the term of the contract. There likely to be a penalty if you wish to leave before the end of the agreed term, but in an age when prices appear to be subject to regular change this may be seen as a safe option by many.
Capped: This is similar to the fixed option in most ways. However, if there is a reduction in energy costs then a capped price can potentially come down, but it will definitely not increase above the capped rate during the entire term of the contract.
Green: With this option the electricity is sourced from renewable sources such as wind power or hydro power, for example. If you also use gas, some green tariffs will also off-set your CO2 emission.
Are there any hidden charges?
Some suppliers may add a daily standing charge to your fuel bill. The presence of a standing charge may not mean a worse deal as the unit cost for gas and electricity used may be cheaper.
You should also check whether any price or rate quoted includes VAT (value added tax). VAT on gas and electricity for domestic and residential use is currently charged at the reduced VAT rate of 5%.
Most energy comparison providers will not charge you to use the service, they receive a small commission from the energy supplier for providing the service. It is also worth noting that this doesn’t affect what you pay and the tariff prices quoted on a comparison site are exactly the same as those you would find on a supplier’s site.
Methods of payment
Most suppliers offer a variety of payment methods and schedules. These may include quarterly or monthly bills that can be cash, cheque, postal order or online banking. There may also be options for prepayment meters. Suppliers will often offer a discount or special tariff for customers paying by monthly Direct Debit and for those who manage their accounts online with paperless billing. Check all the options offered by a potential new supplier in order to make the right decision for you.
If you already have a prepayment meter you will need to have it changed to a credit meter. Some suppliers may charge for this but many will do it for free as long as you pass the relevant credit checks. If you are used to using a prepayment meter you should be prepared to budget for your new method of payment.
What if I owe money to my current supplier?
If your account is in debit you may not be able to switch to a new energy supplier until you have paid your current supplier what you owe. This usually only applies if you owe the company £100 or more.
You should remember that you will still have to pay your final bill, however much you owe. If you pay by Direct Debit or Standing Order then your final bill may be more than your regular monthly payment. This is because your annual usage is averaged out for monthly payments and might not match your actual usage exactly. On the other hand, you might even find that you've overpaid and your supplier owes you some money.
Don't forget to take your own final reading when you switch suppliers, generally your new supplier will prompt you to do this and make sure it matches your final bill.
Once you have made a decision to switch, your new supplier will arrange everything else. The new supplier will send a welcome pack approximately 2 weeks into the entire switching process. This will include information on things like terms and conditions, tariff details and the expected live date.Back to top