Switching energy suppliers - busting the myths which cost us dearly
Posted by Alison Vickers on 21 February 2018 at 3:15 pm
When it comes to the necessary evil that is a fuel bill, are you happy to pay it without giving so much as a second thought? Or perhaps you’ve considered whether you might be paying over the odds for your energy but feel daunted by the process of switching suppliers. Figures from Energy UK highlight that the number of customers switching supplier has risen by 14%, with nearly 400,000 customers changing provider in January, following a record 5.5 million customers switching throughout 2017.
In this blog we aim to help you capitalise on this momentum by busting a number of common myths about switching energy suppliers so that you feel more confident and knowledgeable about where you stand.
Let’s start with admitting that energy pricing in the UK is a largely convoluted affair. It all starts with a wholesale price for gas and electricity, this is the amount that your supplier will be paying for each kWh before they sell it on to you. This price is extremely variable and fluctuates greatly throughout the year. The UK is still heavily dependent on gas-fired power plants for electricity generation. So, higher gas prices mean higher electricity prices on too.
Last year, each of the big 6 energy suppliers (British Gas, Eon, N-Power, Scottish Power, SSE and EDF Energy) increased the costs of their standard-variable tariffs by up to 14.9%. This means that if you are on one of these tariffs you are most likely paying much more than you need to for your energy!
There are a number of common misconceptions regarding switching, here are a few...
- I’ll have to get work done in my home!
All suppliers use the same pipework and wiring so no engineers need to be sent out to you and no work will need to be carried out. The only difference will be the company that bills you. Your supplier may wish to change your old gas or electricity meter over to a newer model, e.g. a smart meter. However this is by no means compulsory and you have the right to refuse a smart meter if you still don’t feel ready to have one installed yet.
- When switching I should only look at the price.
This is normally the main factor for switching energy supplier but there a few other aspects to think about. Consider the level of customer service offered by the new supplier, have a look online for some customer reviews (see Which? 2018 Customer Satisfaction Survey results). If you do need to speak to your supplier you want to know it will be relatively quick and easy. Other features to look out for are the length of the contract, as well as exit fees which may mean it is beneficial to postpone switching until your contract comes to an end.
- I cannot switch as I am a tenant.
If you are a tenant and you are responsible for paying the energy bills then you are able to switch suppliers. If this applies and your landlord has told you that you cannot switch this is untrue. If your landlord pays the energy bills then you can ask them to switch energy supplier but they are not obliged to do so. If you are unsure of your situation in regards to your landlord then it may be best to speak to Citizen’s Advice or visit this guide provided by comparison site uSwitch.
- Switching while generating for feed in tariff (FiT).
If you have renewable energy such as solar PV, your contract to buy electricity from an energy supplier is independent from your contract to sell electricity through the FiT. This means that if you want to switch your energy supplier you are completely free to do so without any changes to your FiT payments. You will simply receive a bill from your energy supplier, and receive your FiT payments from your original FiT provider. Your FiT rates are fixed and so normally there is no advantage to changing your FiT provider, unless you think you can get better customer service elsewhere.
- I can’t switch if I’m in debt or on a pre-payment meter
This will depend on the length of time you have been in debt with your supplier. If you've been in debt with them for less than 28 days you can still switch (with the total debt added to the final bill). If you've been in debt to your supplier for over 28 days, you'll need to repay the debt first.
In terms of being on a pre-payment meter, you can switch suppliers if you owe less than £500 for gas and £500 for electricity. Under the Debt Assignment Protocol, your new supplier would take on the debt and you repay them instead.
It’s worth mentioning that prepayment tariffs are usually more expensive, so you may want to ask about whether you’re able to change over to a standard or smart meter.
Some final thoughts
Arguably the most effective way to determine if you could switch and save is by entering your current tariff information (stated on your fuel bill or annual statement) into an Ofgem-accredited price comparison website, shown by the ‘Ofgem Confidence Code’ logo. This includes online platforms such as uSwitch or Simply Switch, amongst others.
Citizens Advice has recently highlighted the ‘additional cost of loyalty’ which refers to the over-paying for their energy bills faced by customers as a result of sticking with the same supplier for too long. Therefore, we think it’s time to fight back – if you think you might be overpaying on your energy bills, you can leave your supplier if you feel you’re being taken for granted and could be better off by moving elsewhere. If you still don’t feel able or confident enough to switch then at least get in touch with your current supplier to ask whether you could be put on the most suitable tariff available to you.
We hope we’ve helped bust some myths about switching energy suppliers, and that you feel more confident about going through the process yourself. It is definitely worth checking to see if you can save money especially if you have not done so for two years or more. And remember, this doesn’t just apply to energy, but all of your outgoings, e.g. Mobile phone, broadband and insurance (excluding water bills). Could this be the start of a switching revolution? We certainly hope so.
Image credit: Donnell King.
About the author: Alison joined The National Energy Foundation in 2017 as a Households and Communities Project Officer. With a BA in English and Politics and an MA in Environmental Politics from Keele University, Alison plays a key role in the delivery of the Better Housing Better Health service andGawcott Solar - two charitable projects coordinated by The Foundation.
If you have a question about anything in the above blog, please ask it in the comments section below.
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