As an energy customer, now is the time to give some serious thought to making the switch to a competitive new tariff.
Millions of households could see their gas and electricity bills soar from 1 October when bills are set to increase by £139 ($192) for those on standard or default tariffs due to an increase in the "price cap."
To make matters worse, this latest rise is going to hit households just as many of us turn our heating on as temperatures start to drop.
The good news is, big savings are up for grabs by switching to a cheaper tariff.
What is the price cap?
In August this year, regulator Ofgem announced the price cap is to go up from £1,138 to £1,277 — the highest increase since it was launched in January 2019.
The cap was intended to protect consumers who do not regularly switch and who are on default tariffs — which tend to be the most expensive.
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While the aim was to limit the amount suppliers can charge for a unit of gas or electricity, most energy providers are seeing the cap as a "target" as opposed to a limit.
Justina Miltienyte, energy expert at price comparison site Uswitch, said: “Unfortunately, the writing was on the wall for the cap to go up again, following the continued rise of wholesale prices this year. This increase should be a real wake-up call to consumers that the price cap will not protect them from skyrocketing bills.”
The best way to fight back against rising prices is by switching to a new deal.
How do I go about switching?
Making the move to a new supplier may be easier than you think. The best approach is to use a comparison site. A good starting point is to check out sites accredited by Ofgem, such as MoneySuperMarket, Uswitch and EnergyHelpline.
You will need to provide your postcode and details about your recent consumption — you should be able to find this on your bill. You will then be given a list of plans and suppliers to choose from.
Once you’ve made your choice, you’ll need to provide your full address and bank details.
Which tariff should I choose?
Consider a longer-term fix which will offer security for the next year — or even two — protecting you from future market volatility and further increases.
Stephen Murray, energy expert at MoneySuperMarket, said: “Billpayers can minimise the impact of these rises through the simple act of switching suppliers and your tariff. Doing this can deliver significant savings, with the best deals in the market consistently hundreds of pounds cheaper than standard tariffs.”
What do I need to look out for when switching to a new deal?
When switching, remember to check for any cancellation charges for leaving your current tariff.
Note that you may be able to make savings by signing up to a "dual-fuel tariff" where you get gas and electricity from the same supplier.
Further savings can be made by opting to pay by direct debit.
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When shopping around, don’t limit your search to the “big six” suppliers. Some of the smaller firms can offer some of the more competitive rates, along with a host of other features. Just do your research, and be sure to check out customer reviews.
At the same time, don’t discount a green energy supplier. There are currently some very competitive green deals — you no longer have to pay a premium for being ethical with your energy choices.
When should I switch?
With the introduction of the new price cap fast-approaching on October 1, now is the time to take action.
If you use a comparison site, you should be able to compare and switch in just a matter of minutes.
The actual switch could take up to six weeks.
Will my service be interrupted?
Fears about disruption to your service are unfounded, as you still get the same gas and electricity through the same pipes and wires — just from a different provider.
What are my rights?
When you sign up to a new gas or electricity deal, you have a cooling-off period should you change your mind. This is a consumer right that allows you to cancel a service or contract within 14 days.
You are entitled to a full refund, and don’t need to give a reason. While your new supplier will start the switch process during your cooling-off period, it can still be stopped if you ask.