Take the heat off your energy bills

If you feel your present supplier is giving you a bad deal - move, says Faith Glasgow

Has British Gas finally pushed its luck a little too far? Since Tuesday, when the supplier announced details of a 12.4 per cent price rise to be introduced in September, its customers have been voting with their feet in a big way.

Has British Gas finally pushed its luck a little too far? Since Tuesday, when the supplier announced details of a 12.4 per cent price rise to be introduced in September, its customers have been voting with their feet in a big way.

Energyhelpline.com, an independent energy price comparison service, reports "a mass exodus" of people wanting to leave British Gas. "Within hours of the latest announcement, we witnessed an incredible 1,000 per cent surge in traffic - all British Gas customers searching for a cheaper energy supplier," says director Mark Todd. And they weren't just idly browsing either: "On average during the quiet summer months, the site usually switches 50 people a day, whereas on Wednesday, our first day after the British Gas announcement, the service switched more than 640 customers."

At Uswitch.com, another energy switching service, spokeswoman Jenny Evans reports "a seven or eight-fold increase" in online switching levels, all from British Gas. "We've had to take on temporary staff to cope with the increased demand for comparing and switching over the phone," she says.

The rush for the door is hardly surprising. This will be the second price hike of the year, amounting to a rise of more than 18 per cent for British Gas customers in less than eight months. The company, like its competitors, is feeling the pinch of rising energy prices - but while many other suppliers have also put prices up this year, they"ve made much smaller increases, typically of between 3 per cent and 7.5 per cent.

But it's not just the fact that British Gas has pumped up its tariffs faster than anyone else that is angering consumers. These increases further bolster what have always been the most expensive prices in the gas marketplace - as much as 30 per cent above those of the cheapest suppliers, says Todd.

Since its monopoly ended in 1998, British Gas has been undercut by practically every other energy supplier. Yet, as Adam Scorer, spokesman of Energywatch, says, consumer apathy has meant that it could get away with price differentials.

Todd believes that British Gas has finally overstepped the boundaries of apathy and loyalty that kept customers onside - and that their flight to better value energy has barely begun. "Now their trust has been betrayed, the 3,000 customers who are deserting BG daily is nothing with what's to come. In their mind, this price hike smacks of hypocrisy when you consider the organisation makes almost £300 million in profits."

So could any customers benefit by remaining loyal to British Gas? At face value elderly customers may be better off staying, because it has linked up with Help the Aged to make a "price promise" for over-60s on Pension Credit. This includes a price cap for the next three years, free home insulation and a benefits health check. It's a concession to the most vulnerable consumers - but they would still be better off switching now to a lower-priced supplier and continuing to monitor prices regularly.

What can people save by switching gas suppliers? Scorer reckons that with the latest increases, British Gas customers using a medium amount of gas (ie with annual bills of around £390) and paying by cheque should save around £100 a year.

It costs nothing to change suppliers. Energywatch's website includes a list of accredited price comparison companies, among them Uswitch and Energyhelpline. On the basis of your postcode and rough gas consumption, these companies will provide a list of the most competitive suppliers and show how much you could reduce your bill by; you can then switch online to the one that suits you best. The switching process takes around a month.

If you don't have access to the internet, some companies operate phone services. Or you could contact Energywatch, who can send out a regionalised price comparison sheet.

Consider cheaper ways to pay. Direct debit is generally the cheapest; the average British Gas bill paid quarterly on receipt of the bill stands at £422 a year (£474 after the price increase), but if you pay by direct debit it falls to £378 (£425 after the price increase). Prepayment via a meter is usually most expensive (though British Gas prepayment customers pay the same as standard customers).

There may also be special tariffs or schemes on offer, such as cashback for loyalty, discounts for managing your account on the internet or prompt payment, and deals for older people.

Read your own meter, and challenge suspect bills. Energy companies can massively over-estimate your consumption; but if you pay too much you'll get a credit to your account rather than a cheque in the post.

"The real key to reducing your costs is to make your home more energy efficient," stresses Adam Scorer at Energywatch. Strategies to improve energy efficiency range from simply switching the TV and stereo off instead of leaving them on standby, to full-blown insulation measures. Contact the Energy Saving Trust for more information.

www.energywatch.org.uk, 08459 060708

www.uswitch.com, 0845 601 2856

www.energyhelpline.com, 0800 279 4546

www.saveenergy.co.uk, 0845 727 7200

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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