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Come out as a winner in the energy wars

posted : THURSDAY, 5TH NOVEMBER 2009 04:46:35 GMT comments : 0
Energy consumption

- British Gas prices soar by 35%
- How to slash fuel bills
- Turning up the heat on bills

Looking back, 30th of July 2008 might well be marked as a watershed date for Britain’s energy consumers. On that date, British Gas announced an unprecedented increase on the price of gas - an astounding 35% - marking the single biggest increase ever announced by any of the big six suppliers in the UK.

Because most consumers already pay about 60% of their household energy bills on gas, British Gas' decision to raise electricity prices by 'only' 9% at the same time will do nothing to undo the damage that has been done.

The energy markets are still struggling with the aftermath of this shock. Four of the 'Big 6' energy suppliers (E.ON, npower, ScottishPower, and the Scottish and Southern Group), which together supply about 70% of the UK's households, are furiously working their calculators, deciding by how much to up their own standard rate prices. So while this is going on, what should energy consumers do to protect themselves?

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First of all – get angry. Suppliers are not about to reward you for loyalty. If you have not recently switched tariff or supplier, you will gain nothing by doing nothing.

Come early November, the effect of these recent price increases will be felt. And the effect will be massive – if you have been paying £70 a month on your gas direct debit – the average of what we see go through our service – then your new annual gas bill will suddenly be £1,130. You need to ask yourself: can I really afford that?

Secondly – start looking. You may be thinking that you have missed out on signing up to the cheapest fixed price energy deal – these are limited availability tariffs that come with a guarantee against price increases.

The good news is that ScottishPower has now re-entered the ring by offering an attractive one year price fix tariff which is available from our service (if you are currently supplier by ScottishPower you will need to contact them directly).

So now is a good time to look again. The ScottishPower offer does generally compare favourably against the current British Gas 2011 offer and the EDF Fixed Price 2009 offers (both available from the suppliers directly, but shown on our service for comparison purposes).

Thirdly – switch tactically. If you cannot find a capped rate that works within your budget, switch to the cheapest deal overall using our service – there are savings available of up to £300 on an annualised basis, but be prepared to switch again in 4-6 month’s time when you are notified of a price increase. So be an aware consumer and keep your eyes peeled for deals – that means know where your bills are and have them ready so you can act when that price increase announcement comes through.

Finally – use less energy. When energy prices increase by 35% in one hit and there is no end in sight to future price increases, something has to give. Just visit the Energy Savings Trust website (www.est.org.uk) and follow their excellent advice – the Energy Savings Trust really does offer the UK’s one-stop shop for energy savings advice. Think of it this way – it might cost you 20% more to cap your prices now, compared to what you currently pay, but if you can claw that back by reducing your energy consumption, you’d still be paying the same.

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And be a little sceptical about some of the advice that is being given at the moment. We have noted with great concern that the self-appointed UK consumer champion Martin Lewis (also known as the Money Savings Expert) has recently told people not to switch energy supplier.

This advice has left us scratching our head – the last time Mr Lewis told the country not to switch early in 2008, suppliers like npower and ScottishPower were offering generous 3 year capped rates that are now long withdrawn. Customers who followed Mr Lewis' advice then totally lost out on those offers! With ScottishPower now offering a good capped rate it does not make sense to wait.

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