TWO of the big six energy suppliers – E.ON and EDF Energy – have announced price rises this week.
Experts warn that this is the beginning of a “tsunami of price rises that will sweep across the Big Six”.
It follows energy regulator Ofgem announcement last week that the price cap will rise from April – adding £117 a year to bills.
It means that if you’re on a Standard Variable Tariff you are paying £300 more a year than the current cheapest deal on the market.
But there is a way to avoid it – compare deals and switch suppliers now.
Should you fix?
Energy firms offer two types of tariffs – fixed and variable.
Variable tariffs can go up (and down) and you won’t be charged an exit fee if you want to move to a new deal.
Fixed tariffs lock you in for a minimum amount of time and many of them charge a fee if you leave before this time ends.
The good thing about this is that you are guaranteed to pay this price for a set amount of time.
The cheapest deal on the market right now is a two year fixed deal from People’s Energy, which costs £968 a year on average, according to uSwitch.com. It has an exit fee of £20 per fuel – so £40 if you opt for the dual fuel tariff.
The cheapest variable tariffs is from Orbit Energy which is £974 a year and has no exit fee.
Should you switch to a small energy supplier?
As you can see from the table above all of the cheapest deals at the moment are from small energy suppliers.
In fact, the difference between the cheapest deal on the market from People’s Energy and Scottish Power’s Super Saver, which is the cheapest fixed deal from the big six, is £92 a year.
So, if you’re completely focused on price then you might be tempted to go for a small supplier.
But are they safe? We’ve seen 10 small firms collapse in the last year.
The good news is that you’re with a small firm and it collapses then Ofgem will make sure your energy isn’t switched off.
It will then help find a new supplier and all you have to do is choose whether to accept this or not.
Small firms can often get overwhelmed by new customers if they offer a really good tariff and then you may experience problems with an overloaded customer service team.
It’s worth doing your research before you switch to read reviews from previous customers.
How to find a cheaper energy deal
FIRSTLY, you’ll need to have a recent bill to hand. This will have all the details you need, including the name of your tariff and your recent spending on gas
- Use a comparison website: Customers can use websites such as uSwitch.com or Energyhelpline.com to compare tariffs and find a cheaper deal. You could save up to £400 a year if you’ve never switched before.
- There are other service you can turn to: MoneySavingExpert’s Cheap Energy Club will let you set up an email reminder that alerts you when cheaper deals become available.
- Things to do before you switch: Compare prices and before you switch check to see if you can get cachback from a website like Quidco or TopCashback
How do you find the cheapest deal?
Your energy bill will vary based on how much you use, the tariff you’re on and where you live in the country.
The UK is split into 14 different distribution areas and energy firms price each of the regions differently.
That’s why its SO important to compare tariffs before you switch.
You could also try an auto-switching service like Switchcraft which will find the lowest tariff and continue to switch you when a cheaper deal becomes available.
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