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Your energy bills: loyalty doesn’t pay

Your energy bills: loyalty doesn’t pay

Category: Gas and electricity

Updated: 17/02/2015
First Published: 17/02/2015

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Have you stayed with the same energy provider for years? If so, it could be time to really see where your loyalties lie. Loyalty doesn't pay in this industry, and with official figures from the Department of Energy and Climate Change (DECC) revealing that the typical household could save £200 per year by switching suppliers, it's time to consider your options.

The Power to Switch

The DECC has launched a special campaign to urge you to do just that. The 'Power to Switch' campaign, launched yesterday, encourages people to switch supplier and save money, noting that some fixed rate deals are £100 cheaper than they were a year ago. There are now 26 energy companies to choose from, too, far more than many people think, so there's never been a better time to find a great deal.

Launching the campaign, Energy and Climate Change Secretary Ed Davey said:

"When it comes to switching, the power is in people's hands to get a better deal and save. We've reformed the market so that there are more suppliers, more competition, and a much faster and simpler process to switch. That means millions of people can switch supplier and save hundreds of pounds today."

Strengthened codes, more reforms

The Government has implemented a raft of reforms to help boost competition and service levels in the industry, including cutting switching times (down to 17 days from five weeks last year), encouraging new suppliers onto the market (there are now 20 independent suppliers to choose from), and legislation to force energy companies to make bills clearer and ensure they provide information on how customers can switch. This is in addition to the regulator's strengthened Confidence Code – Ofgem has set tighter standards on how tariffs need to be displayed on comparison sites, ensuring consumers have greater confidence that they'll be able to make savings.

Be disloyal

These reforms mean it's easier than ever to switch – and ensure you've got plenty of choice in where to go next. Essentially, failing to do so could mean you're paying £200 per year too much for your energy, and that's something that won't sit well with many consumers. Don't be swayed into thinking that the recent price cuts mean you're better off, either – energy companies have only lowered typical bills by around £40 per year, and even then, only those on already expensive standard tariffs will benefit. Consumers on a typical standard tariff will pay in excess of £1,150 per year, while the cheapest fixed tariff comes in at just over £900, so doesn't it make sense to consider your options?

"2015 needs to be the year that the British public takes control of their energy costs by switching and getting the best deal out there," said Mark Todd, director of comparison site energyhelpline. "Even the Government is imploring people to switch, revealing that half of the UK's households are paying more than they need to for their energy. Too often energy customers in Britain are loyal to their provider, but these people almost always lose out – if you don't switch, only your energy supplier will get rich."

Being loyal simply doesn't pay, so if you want to see how much you could benefit, start comparing the options. Use our handy search tool to find the best tariff for your energy needs, and don't always go for the big names – a lot of smaller, independent providers are giving the Big Six a run for their money, so it could be time to think outside the box. Start the process and see how much you could save.

What next?

Compare household gas and electricity

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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