The five minute energy swap challenge - Susanna V Martin
Last month our Money Saving Expert Martin Lewis challenged our Susanna to switch her energy supplier within five minutes – which she successfully did – saving £368 a year. And as over 60% of people are on their supplier’s standard tariff, paying typically £300/year more than they need to, Martin is here to explain how you can do the same…
Even if you’re thinking 'I switched a year ago so will be on a good deal', you’re most likely not. Most cheap deals are for a year, so if you’ve not switched in the last 12 months and are with one of the big six – British Gas, EDF, E.on, Npower, Scottish Power and SSE - you’ll be on their very expensive standard tariff. And if you’re with anyone else, you could still be overpaying too, so check.
Did it really take five minutes?
There’s lots of balderdash spoken about how complicated this is. But it does only takes minutes to find your cheapest deal – though the switching process takes a couple of weeks, you don’t do anything, the energy firms do that. Those who worry about switching, don’t – it’s the same pipes, gas, meter, safety – you don’t lose supply – the only difference is price and customer service. And there’s no break in supply when you do switch.
As your cheapest depends on where you live and what you use, there’s no one winner. So just plug your details into Martin’s ‘Cheap Energy Club’ or any other Ofgem-approved comparison site and it'll give the best deal for you. It’s best if you have your bills to hand to do this, but even if not, most comparison sites will estimate for you and the sin of inaccuracy isn’t as big as the sin of doing nothing.
Though do beware, as comparison sites are now allowed to only show you tariffs that pay them, which means you may not see all the deals (for the sake of transparency Martin’s Cheap Energy Club defaults to all deals). Though sadly these won’t work if you’re in Northern Ireland.
Those who aren’t online can call up some comparison sites too (or ask friends who are more web savvy to help them).
When you compare, the cheapest are always small companies that I’ve never heard of?
Actually, when people talk about the difficulty of switching I think it’s not the comparison, but it’s picking their winner. The huge encouragement given for new entrants to the energy market is actually putting many off switching. And to an extent there’s good reason. The energy market is swamped with new firms, and often at launch they offer super-cheap deals to build a customer base; yet feedback is limited or poor.
Someone on typical use (by this, to be technical, I mean Ofgem’s typical use for someone on a dual fuel direct debit tariff) on a big six standard tariff is spending £1,132 a year.
The very cheapest deal on the market right now (on average it’s different for everyone depending on usage) is a tiny new provider called Outfox the Market at £807, but there’s no customer service feedback on that and it’s variable so the price can change. And you’ll usually find the first five or so firms are new ones with no or limited feedback.
If that worries you scroll down to one that does. Avro has a 1 year fix for example at £840 and has decent feedback ratings (some sites allow you to filter by feedback).
Or if you want a name you know, that’s fine. For example First Utility has a 1 year fix priced at around £900. Yet always do a comparison as the cheapest does depend on your situation.
And remember most cheap tariffs are fixes, meaning you’re guaranteed no prices rises for a set time.
What about those people who just won’t switch?
I get that a lot, and then people ask me questions like: "I'm with Npower - is it cheap?" I can't answer that, as what you pay depends on which of a firm's tariffs you are on. For example, First Utility has one of the most expensive standard tariffs at a typical £1,132/yr, yet it also offers a relatively cheap fix at £898/yr.
In fact EVERY Big six provider has a cheaper deal than its standard tariff - so through gritted teeth let me say, if you won't switch as you're loyal to your existing firm, at least ensure you're on its cheapest tariff. Call them up and ask them (or better use a comparison site to see your providers cheapest and how much extra you’ll be spending to be with it).
What about those on prepayment meters?
If you pay by a key or card meter, as many of the country’s poorest and most vulnerable do, then outrageously there’s nowhere near as much competition, and you pay more – though prices have been capped which has helped a touch. If you do a comparison there are often savings to be made, but often less than £100.
Yet if you can, try and switch to a billed meter. It’s free to do with one of the big six providers, and you’ll usually be credit scored to check you’re capable of keeping up with payments.
And for those who are struggling to pay at all.
Too many have to choose between heating and eating. So make sure you’re on the cheapest tariff, but if that isn’t enough call the Energy Saving Trust helpline on 0300 123 1234 (England and Wales and Northern Ireland) or 08088082282 (Scotland) to see what help is available to you.