Thrifty Living: It's a good time to make the switch
Saturday 21 February 2009
Britain’s energy suppliers have finally started to cut their prices over the past few weeks, reflecting the collapse in wholesale gas and oil prices that has taken place over the past eight months or so.
Although the reductions in household bills have not been as great as some had predicted, analysts believe there is every chance that there will be a second round of price cuts later in the year.
If you haven’t changed you energy supplier over the past few years, then you can probably wipe hundreds of pounds off your annual bills by taking the plunge now. Websites such as theenergyshop.com, uswitch.com and switchwithwhich.co.uk will help you find the best deal.
But even if you have switched in more recent times, you may still be able to realise even greater savings by moving on yet again this winter.
So far, only four of the big six energy suppliers have announced price cuts this year – British Gas, Scottish & Southern, Eon and EDF. However, the other two – npower and Scottish Power – are expected to follow suit soon. Nevertheless, there’s no need to wait for these announcements to start thinking about making a switch.
“The argument for waiting is based on the fact that we don’t yet know what the remaining two suppliers will do with their own price cuts,” says Joe Malinowski, the founder of the price-comparison site theenergyshop.com. “It’s a point, but it misses the bigger picture, which is that you can get three times the saving by switching now rather than waiting for your supplier to cut your bills for you. And every day you wait is costing you money.”
With wholesale energy prices now falling, the best tariffs to be on at the moment are variable-rate ones. Although the energy futures markets are predicting that prices will start to rise again in 2010 and 2011, household prices are expected to continue falling during the rest of this year.
Malinowski says that the best deal currently on the market is British Gas’s Websaver 2. This guarantees to stay at least 6 per cent below British Gas’s standard tariffs all the way through until June 2010 and the deal is available to both new and existing customers. For anyone on British Gas’s standard tariff, that’s an instant 6 per cent saving – which, for the average family, would be worth more than £70 a year.
But for those who took out fixed-rate tariffs at the end of last year, the savings could be much greater – and it may be worth paying the exit penalty to escape from your current deal.
At the moment, the Websaver 1 package would end up costing the average family around £1,060 a year – for both their gas and electricity. Some of the fixed-tariff deals available at the end of last year, however, would have given the average household a bill of almost £1,500.
If you signed up to a fixed-rate tariff earlier last year, you may, however, be better off staying where you are. “With energy prices set to fall, people who are on fixed-price plans are likely to be worried that they will end up losing money,” says Will Marples, energy expert at uswitch.com. “In fact, the majority of those people who signed up to competitive plans earlier last year are sitting pretty. Prices would have to come down by £185, or 16 per cent, before they would be out of pocket.
“The people who do need to worry are those who signed up to a fixed-price plan towards the end of last year or at the beginning of this year. They are already paying on average £62 more than they would if they were on a standard plan, and £132 more than if they moved online. As prices fall, they will lose out even more.
“Fixed-price deals offer security against price rises in the medium to long term. This peace of mind comes at a premium and customers must consider whether that is more important to them than the benefit of switching now to one of the cheaper online deals. Online plans will offer significant savings for many of these customers, even after paying any exit penalties that may apply.”
Independent Partners: See how much you could save by switching credit cards. Compare now
Simon Read: Readers think I should cough up and pay for a tradesman's travelling time
No television licence leads to debt woes after court fines add up
Mark Dampier: Small can be beautiful for those investors who think long term
Tax boost for social investment will unlock £500m
Five ways to make money on the internet
- 1 Cameron's freebie to apartheid South Africa
- 2 Is this the scariest advert ever? Japanese tyre commercial comes with its own disclaimer and health warning
- 3 Sherlock series 3: Benedict Cumberbatch and Martin Freeman provide teasers for the biggest comeback in British television
- 4 A forgotten episode in Russian history leaves links with the Philippines
- 5 People will try to reduce Mandela to a lilting reggae tune about ‘love’. They will fail
- < Previous
- Next >
iJobs Money & Business
£80000 - £100000 per annum + benefits + bonus: Harrington Starr: Project Manag...
£50000 - £60000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£30000 - £40000 per annum + Bonus and Benefits: Harrington Starr: A global Con...
£150 - £250 per day: Cornwallis Elt : iPhone Rollout- Blackberry Enginee...
Day In a Page
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.
John Lennon's childhood home in Liverpool to be sold at auction. Guide price: £150,000-£250,000.
A six-bedroom detached period property with secluded gardens, ample parking and a double garage in Rye, £675,000.
A large split-level property with three double-bedrooms and roof terrace, close to Crouch End Broadway, £625,000.
A charming barn conversion in the picturesque Cotswold village of Ilmington with three bedrooms, a detached garage, workshop and beautifully manicured gardens £675,000.
A three-bedroom new build, ground-floor flat with two bathrooms, close to Bermondsey tube, £445,000.
A three-bedroom house in an enviable new development moments from Oxshott High Street, with secluded garden and decked area, £385,000
A two-bedroom split-level flat with stunning south-west facing roof terrace in the popular Brondesbury Conservation Area, £549,950.
A charming 16th century, three-bedroom detached house in Bidborough with picturesque garden