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As the temperature outside drops and it comes time to turn on our central heating again, many of us will be concerned about the cost of our gas and electricity bills over the next few months.
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As the temperature outside drops and it comes time to turn on our central heating again, many of us will be concerned about the cost of our gas and electricity bills over the next few months. One of the best ways to keep costs down is by finding the right energy supplier and tariff- but when is the right time to switch?
In this guide, we’ll be looking at how changing energy suppliers can save you money and when it’s the best time to make the switch.
Energy providers often reel you in with fantastic offers on fixed and variable rates, usually over a 12, 18 or 24 month period. However, once this deal period has ended, the provider usually moves you onto its standard variable tariff (SVT), relying on customer inertia to keep you there.
Unfortunately, many don’t realise that the standard variable tariff is where it's most expensive deals are now all of the perks and incentives have ended. Lots of households forget to make the switch as their deal comes to an end or simply can’t be bothered to change and end up paying a more expensive rate that could be costing them around £300 more each year.
In fact, Ofgem estimated that in 2018, almost 20m households were stuck on SVTs and were paying around £300 more than the cheapest rates. Once your deal has ended, there is absolutely no reason why you must stay with your existing provider which is why shopping around for a new deal could help you to save thousands of pounds.
If you have been with your current energy provider for more than 2 years, your initial deal will probably have expired and you may be on the more expensive tariff so now would be a great time to shop around and find a better deal.
Energy providers can be sneaky and will typically hike up their prices just as the winter months begin. This is because they know you’re most likely about to use more
gas and electricity to heat your home as the temperature drops and will attempt to make more money off you. Some suppliers also claim it costs more to buy and provide energy in winter due to the higher demand.
That’s why you should aim to switch your supplier in summer and early autumn when the prices tend to be a lot lower. Additionally, you can also get some money back from your current supplier as when you set up your deal with them, you will have provided details of approximately how much energy you use in a year. This would have been used to work out your monthly fee.
However, over the year, you usually use more energy over the winter months and less over summer, meaning you underpay in winter and overpay in summer (though this balances out over the seasons).
This means you may have some credit left if you make the switch during summer as you won’t have used as much energy as predicted.
Don’t wait until your current deal has expired to start looking for a new deal, otherwise, you’ll be moved onto the more expensive standard variable tariff. Under Ofgem regulations, your provider must inform you that your deal is coming to an end at least 42-49 days before the end of your tariff.
Once you have received this notification, you should get shopping. The best part about this is that you won’t have to pay any exit fees during this period which is known as the ‘switching window’. The sooner you make the switch during this time, the sooner you can start to save money on your bills.
For more information and advice about gas, electricity and water, check out our other helpful guides.
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