On most days, your routine is the same. You arrive home from work, turn on the kitchen light, and fire up the cooker in order to make the family dinner. Yet the minute you walk into your home, you start the meter running as you consume energy for any number of purposes. With every turn of your meter, additional pennies pounds are added to your bill.
If you could save a significant amount of money by switching utility providers, would you? We ask because statistics show the average UK consumer finds a power company they like and sticks with it for years at a time. It has been estimated that the majority of UK adults that have never switched to a new provider are now paying more than they need to. Switching keeps energy companies honest while ensuring individual consumers get the best deal.
Playing with the Big Boys
It should come as no surprise that utility prices have been steadily increasing over the last decade. That's normal. Inflationary pressure, price fluctuations on the international market and other factors constantly nudge prices up every year. It doesn't matter which power company you deal with, the same thing happens with all of them.
That said, there are six major utilities providers in the UK. Some of them raise their prices more drastically than others. That's why it is important to compare pricing on a regular basis. The sixth major providers are:
- British Gas
- Scottish Power
According to published pricing information, all six have raised their rates for 2013; increases range from 6% to 11%. EDF leads the way with a 10.8% increase in both gas and electric that took effect December 2012. They had previously cut prices by 5% in February of last year. British Gas announced the lowest average increase at 6%.
There are obviously dozens of other smaller distributors with varying price rates. What's available to you depends on where you live, how you pay for your utilities, and how much your regular consumption is.
Knowing Your Meters
Before beginning your comparison of gas and electricity prices, it is important to know the different types of meters. Finding a lower rate or a better tariff is often tied to the meter you use. The six types of meters in the UK are:
- Standard Meters - The standard meter utilises an aluminium disk that spins at speeds in direct proportion to the amount of energy you are consuming. With each revolution, the disk moves a series of dials or a digital display representing your energy consumption in a series of numbers.
- Dial Meters - A dial meter employs a group of five dials that resemble small clocks. The dials may move in either direction according to the way the meter has been set up. Reading dial meters can be confusing to some, but the general rule is always to round down to the nearest number.
- Digital Meters - More people are switching to digital meters because they are so much easier to read. You simply record each number in the display except the last one (if it's a zero or one).
- Prepayment Meters - The prepayment meter is to utilities what a prepaid mobile phone is to mobile communications. These meters offer a pay-as-you-go utility model that lets you base your price solely on consumption. Whenever your meter begins to run low, you simply top it up.
- Economy 7 Meters - Consumers willing to use the majority of their power at night are eligible to utilize the Economy 7 meter in conjunction with the Economy 7 tariff. These meters have two sets of dials - one for daytime use and another for night time use - in order for the utility company to charge appropriately. Overall bills are lower because energy used during the night hours is less expensive.
- Smart Meters - The smart meter uses a wireless transmitter to collect the meter data and display it where it is directed. The smart meter allows readings to be taken remotely. When you use a smart meter, you are able to give your power company an accurate reading, even while you are away, so you don't have to rely on estimates. NOTE: the UK government promises to install smart meters in every home by 2020.
The important thing to understand about your utility meters is that you should always take the readings yourself and report them to your utility provider. Never rely on their estimates if you want the best price. By design, utility company estimates are higher than they should be in order to protect them against possible losses. Do not put extra money in their pocket, take your readings yourself.
If you are unable to read your own meters due to disability, you may be eligible for free readings from your power company. However, you may have to put in a request periodically in order to get them to come out.
Using Comparison Websites
There are several different ways to save money by comparing utility prices online. One of the most common is a scenario in which a customer combines both utilities with the same provider. Believe it or not, this is not something everyone does.
If you are purchasing both your gas and electricity from separate companies, and paying standard pricing for both, you might be surprised to find out how significant your savings could be by combining them with a single supplier. That is the sort of information you find when you compare rates online.
Another thing to consider comes by way of moving into a new home or flat. It is not uncommon for people to simply stick with the utility providers used by the previous occupants of the home. However, if they did not do their homework there is no way to be sure they were getting the best price. Whenever you move into a new home, compare utility rates rather than just going along with whatever is in place.
When you are ready to start comparing rates, remember the tariffs are important. You need to know the names of the tariffs you are currently on in order to make proper comparison. If you do not know, simply contact your current providers and ask. While you're at it, find out what your supply region is. That information will make your comparisons a lot easier.
Switching Utility Providers
Let's just say, after reading this article, you are inspired to go hit the comparison websites and find a better price for utilities. What do you do once you find a better price? You start working on getting switched over to your new provider as soon as possible. Here's what you need to know:
- Payment Method - You'll need to inform your new provider of your payment method. Those using prepayment meters are only eligible for the prepayment tariffs. Everyone else has a number of tariffs from which to choose.
- Selecting Your Tariffs - Utility tariffs in the UK can be either variable or fixed rate. Just like a bank loan, a variable-rate tariff will fluctuate along with market conditions while the fixed rate tariff remains the same throughout the duration of a given term. You might want to investigate both types before settling on which one is best for you.
- Application Process - Once you've assembled the required information, the next step is to fill out the application. Many comparison sites and utility providers let you do so online. If the application form is confusing to you, there's no reason why you cannot call a representative for help in filling it out correctly.
- Changing Your Mind - As a general rule, utility companies offer a cooling off period in case you change your mind about the switch. The average cooling-off period is 12 to 14 days. However, in some cases it could be seven days or less. Make sure you know what the cooling-off period is before you submit your application.
- Contract and Service Details - Once your application has been processed and your account approved, you will be sent a new contract and documents covering your service details. Be sure to thoroughly read and understand this paperwork. If you have questions, do not delay; contact your new provider right away for answers.
Don't forget that if you have an outstanding balance with your old provider, you will still be required to pay it. If you had an automatic payment program in place using a debit or credit card, leave it in place until final payment has been made. The last thing you need is for your previous provider to begin the collection process against you.
Just because utilities are something you cannot escape, you don't have to settle for prices that are higher than they need to be. You can save a lot of money by shopping around and comparing the rates of multiple providers. If you have some free time over the course of the next couple of days, we encourage you to start comparing. Who knows? You may find prices for utilities that are substantially lower than what you are paying now.
It would be impossible for us to list all of the gas and electric companies available to you in the UK. However, we have provided links to three of them below. By following these links, you'll get a good idea of what's out there. After you've looked at them, be sure to check out the links we have compiled for comparison websites.
British Gas - Your starting point for all the information about British Gas utilities. You can find information about tariffs, payment plans, and even an opportunity to fix your rates through until 2014. If you participate in the Nectar rewards program, you could earn up to 1,800 points by signing up with British Gas.
Southern Electric - This is the gateway to utility programs offered by SSE. You can choose from a basic energy plan or look into a two-year capped price program. SSE's best deal is a discounted energy program that gives you 2% off their variable tariff until April 2015.
E.ON -The main website for E.ON Energy. They offer gas and electricity to residential homes and businesses at competitive prices. Current customers can also log in here to manage their accounts online.
Comparison websites offering rates for multiple gas and electric providers are plenty. We have provided links to the most well known of these sites to get you started. If you take the time to do a thorough comparison, you are likely to find a better rate than you're currently paying. Good luck!
Go Compare - Here you can compare prices for gas only, electric only, or dual fuel. They also offer a chance to win free home insurance for new users (restrictions apply).
Money Supermarket - Shopping here is quick and easy. All you need to submit is your postcode, the name of your current supplier, and your bank information. They claim 10% of their customers save as much as £300.
Confused.com - Offering comparisons from all of the major UK energy providers, providers like EDF and SSE. When you compare and apply online, you could save more than £320.
Compare the Market - A website offering comparisons on a variety of personal financial products. In terms of utilities, they specialise in dual fuel suppliers from across the UK.
Tesco Compare - This site lets consumers compare and apply online through their partner, TheEnergyShop.com. While you are on the site, be sure to read their tips and tricks for comparing energy prices.
uSwitch.com - On this site you can compare in one of two ways. The first option is to answer three simple questions on their online form to get targeted comparisons specific to where you live. The second option is to browse an easy-to-read chart that compares average rates among the biggest providers.
Money.co.uk - Dozens of different gas and electricity deals are compared on this site. All the information is laid out in an easy-to-read grid that gives you all of the vital information in one place.
Totally Money - By answering two simple questions, you can get energy price comparisons in a matter of minutes. If you are ready to switch, you can do so online and never have to make a single phone call.
Money Saving Expert - Here you will find multiple guides tackling various aspects of home and business utilities. The guides are written in everyday English that most consumers will easily understand.