Thrifty Living: It's a good time to make the switch

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; request a free guide on NISAs from Hargreaves Lansdown

News
people
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam