Our gas and electricity bills are some of our most substantial monthly expenses. Over a full year energy is likely to account for 5% of a household’s disposable income. And yet, last year 85% of us did not switch energy supplier to find a better deal! In typical British fashion it seems that most of us are more likely to complain and stay put than to take the time to jump ship. However, for those who do opt to find a new supplier, the benefits can be huge.
Why should you switch energy supplier?
The energy industry has not exactly covered itself in glory over the past decade. Scandals over billing, huge price hikes and poor management have left customers angry. However, we are now in an era of increased choice when it comes to energy. While, a decade ago, it may have been a case of selecting the lesser of two evils, now there are many more options. Whether you want to buy your energy from a big name or a smaller coop there is plenty of choice. Best of all, if you do switch your energy supplier then you could make some serious savings. According to Ofgem research, if you switch energy supplier you could save £300 a year – or 25% of the typical annual bill!
What information do you need to switch?
If you’re considering making a change then all you need to do is collect some basic information:
Name of your current supplier
Your address and postcode
How much you currently spend (or use in kilowatt hours – kWh). The best place to find this is on your annual statement from your current supplier.
Your bank details so that you can set up direct debit payments with a new supplier.
There are numerous online comparison sites that will help you find a better deal on energy. Many also make it very simple to switch right there and then as long as you have the above information to hand.
How to choose a better energy deal
If you’re using a comparison site to switch energy supplier then you might be presented with an overwhelming volume of options. You can refine these down by looking at factors such as deals with no exit fee or those that offer a fixed rate. Choosing a fixed rate means that the amount of energy you pay over a specific period won’t change. This can be very useful when it comes to budgeting for energy spend. Shop around for the lowest energy rates for your usage. It’s often worth working out when you use your energy the most and choosing a deal based on that. If you’re really only using energy during off peak hours, for example, you could find a deal that slashes your monthly costs.
What to bear in mind when you switch energy provider
If you’re leaving an old energy provider before then end of a contract then you may have to pay an exit fee. The fee depends on the individual provider but many come in at around £40-50. Once you have finished the switch process then it will take around three months for the transition to complete. You won’t experience any disruption in energy supply by switching your provider – the lights won’t go out and the heating won’t stop working. There is no physical work to do (i.e. laying new cables). The only difference when you switch energy provider is that your bills then come from a different company.
Apps that make switching easy
Given the huge savings that you can make by switching energy provider it’s surprising that more people don’t do it. For many, the idea of paperwork and hassle is off-putting. However, this is something of a misconception as there is very little effort involved. And with the benefits of modern technology it’s now even easier to switch energy providers. A new smartphone based switching service called Voltz has been introduced to make it far easier to move from one supplier to another. Voltz is an app that you can enter the same basic information into as a switching website. It will show you the best details and in many cases the switch takes place at the touch of a button.
If you don’t want to be involved in the switching process at all then there are other services that can do it for you. Flipper, for example, will identify the best deals for you and then automatically switch. You pay an annual fee of £25 but this is only charged if you’re making savings of £50 a year or more. Flipper continuously sweeps energy tariffs to find the best deals for customers. As it doesn’t take commission from energy companies it’s truly independent.
Whether you find an app to help you, or manage the process yourself, switching energy suppliers is likely to save you money.
Alex Hartley is a keen advocate of improving personal finance skills. She's worked at Solution Loans since 2014 and written hundreds of articles about how people can manage their money better. Her interest in personal finance goes way back to...Read more about Alex Hartley