If you can't stand the heat, switch supplier

You only need blink these days to miss another hike in your fuel bill. Last week, both EDF Energy and Powergen announced their fourth gas and electricity price increase in 18 months; the cost to the latter's average customer is now an extra £106 a year, according to price-comparison website uswitch.com.

These two suppliers are not alone. Since January 2004, Scottish & Southern Energy has raised its gas and electricity prices three times, while npower and Scottish Power have done so twice.

All point to the higher cost of wholesale gas, whose price has doubled in the past 12 months as a result of the depletion of UK reserves and a lack of access to European pipelines. The impact of this rise has been passed on to consumers.

But there are ways to beat the fuel bill blues, and the first is to consider switching energy supplier.

If you've never done this before - and about half of us never have - you can usually save an average of about £170, according to uswitch.com. And even if you've already switched in the past couple of years, check to see if it is worth doing so again as the price rises have been so swift.

Since the energy market was deregulated in the late 1990s, a greater choice of suppliers for gas and electricity has sprung up.

If you have internet access, try logging on to sites such as uswitch.com, simplyswitch.com and energyhelpline.com with details of how much you're paying now. They will compare different tariffs for you, free of charge, and arrange the changeover if you find a good deal.

Another approach is to put a lid on what you pay, with a "capped" tariff that usually lasts between six and 18 months. While you will pay more than on a standard contract to start with, at least there will be a price ceiling that lets you budget more easily.

Here's how it works: if a particular supplier's customers pay 20p per unit today, it might offer a price cap of 25p. If the cost then rises above this, you don't pay any more. But if this unit cost tumbles, so does the price.

The trouble is, these deals at these rates may not be around for much longer, says Mark Todd of energy- helpline.com. After last week's moves, he warns, other providers are likely to raise "gas bills by 20 per cent and electricity 15 per cent in late August". This could lead to more expensive caps.

"To protect themselves, consumers should consider moving to a capped tariff as soon as possible. There could be further price rises [from all suppliers] of around 10 per cent in January."

British Gas withdrew its capped tariff in June, and while npower, Scottish Power and Powergen still offer them, the rate for new applications will probably rise from August onwards.

But there are other ways to save money on your fuel bills. These include paying by direct debit, settling your bill within a set period, taking gas and electricity from the same supplier (known as "dual fuel") and managing your account online.

For example, Powergen offers a 3 per cent discount to customers paying by direct debit and Scottish & Southern offers a "prompt payment" discount of 3.5 per cent.

Scottish Power customers prepared to manage, and pay, their account online receive a £15.75 dis- count if they receive both gas and electricity from the company (or £5.25 if it's just electricity).

Some providers offer extra help for older or vulnerable people.

Powergen's Staywarm scheme, open to those who are 60 and over, offers a fixed price for 12 months from the date you sign up.

British Gas caps energy bills until October 2007 for customers who are over 60 and on pension credit.

A New Firm Takes Power

David Hulme is a switching supremo. After tiring of ballooning gas and electricity bills, he first changed his supplier to Powergen nearly two years ago.

But since then prices have risen enormously. His patience recently ran out with a £600 bill from Powergen for his three-bedroom house in Surrey, and so he began to look around for a new supplier.

Logging on to uswitch.com, Mr Hulme examined all the different deals and chose to sign up to npower's online tariff for dual fuel - capped until January next year.

The website estimates that he will be able to chop around 10 per cent - £60 - off his annual bill.

"I first switched ages ago and, after being in this house for 18 months, thought it was time to do it again," he says.

"Npower came out as cheapest on uswitch and said it could save us about 10 per cent.

"But, since then, Powergen has announced price increases, so the saving is probably worth more than that now."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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