Lock in to the cheapest energy deals for years
IT’S not often I write about the price of a barrel of oil. The US oil price went negative, they couldn’t sell it, instead they were paying to have barrels stored. Of course, the cause is obvious, the coronavirus-driven economic slump means there’s no demand.
The slump at the pumps feeds into the price we pay for gas and electricity too. Huge savings are possible now.
■ DON’T RELY ON THE PRICE CAP, IT’S NOT CHEAPER
THE majority of UK homes are on tariffs at or near the price cap. This gives you a false sense of security. That price is capped at £100s a year more than the cheapest tariffs. The price cap only moves every six months, so it hasn’t factored in the recent drop in the oil price.
For someone with typical use, the cap is currently £1,127/year, while the cheapest deals are less than £800/yr. That’s why EVERYONE should check their tariff and take advantage of historically low oil prices.
■ IT’S FINE TO SAY SWITCH NOW, BUT IF I DO WON’T THEY JUST PUT THE PRICES UP?
NO one knows what’ll happen to the market going forward. So I suggest look at a FIXED tariff; then the rate you pay is locked in, for at least a year – what you actually pay depends on usage – but by locking in you get today’s historically cheap rates.
Of course it’s possible prices can get even cheaper, but most people are overpaying, so the impact of locking in at these prices if things do get cheaper, is for most trivial compared to not doing anything and paying massively over the odds.
■ HOW CHEAP DO THESE CHEAP FIXED TARIFFS GO?
AS mentioned the typical big six standard tariff is within a pound of the £1,127/year price cap for someone with typical usage. Yet, for the same usage the new cheapest 1yr fix is £774/yr on average, that’s £350/year cheaper with Green Network Energy. Other cheap fixes include, Tonik Energy, British Gas, Avro, EDF and E.on.
Importantly, many of these tariffs are for new customers only, not existing. Yet don’t worry, if you were with EDF and wanted to stick with a big name, there’s Eon or British Gas to choose, or vice versa.
■ TO FIND YOUR CHEAPEST DEAL, DO A COMPARISON
USE a comparison site like my cheapenergyclub.co.uk (which also gives £25 dual fuel cashback you don’t get direct) or any ofgem.gov.uk approved site. Plus, some of the cheapest tariffs, like British Gas for example, are only available via comparison sites. You can’t just call it up and ask for it.
And if you’re worried about the practicalities of switching, very little changes. It’s the same pipes, gas, meter, safety – you don’t lose supply – the only difference is price and customer service. And no one needs to visit right now. If you need a smart meter fitted, they’ll only come and fit them once it’s safe to do so after lockdown.