Will changing your energy tariff save you money?

Holly Thomas / 17 September 2014

Energy customers are being urged to choose new tariffs when eight different popular fixed term deals expire.

On September 30 2014 energy deals came to an end and customers will be automatically placed onto a standard tariff bringing in an average annual bill increase of 11% – or £108.

Suppliers with tariffs expiring at the end of September are EDF Energy, First Utility, Scottish Power, M&S Energy, and iSupplyEnergy.

It is those customers in north-west England with First Utility, who are currently on the iSave Fixed v7 September 2014 dual fuel tariff, will see the biggest average bill increase of all, at £237.65, or 21.9% according to Gocompare.com.

The biggest increase for a 'big six' customer will be felt by those living in south-east England, who are on Scottish Power's Online Energy Saver 23 tariff, with an average price hike of £164.93, it said.

Jeremy Cryer, energy expert at Gocompare.com, said: “Ofgem, the energy regulator, has introduced steps to make it easier for people to switch providers, including a rule that, once you receive notification from your supplier of your fixed tariff coming to an end – usually 42 to 49 days before it's due to expire – you can switch without any exit fees being applied.

"And that's exactly when you should start shopping around, as it can take as much as four to six weeks to transfer to your new supplier.

“Not taking action and just rolling onto your supplier's standard tariff is the very worst option. Failing to compare your energy tariffs against the others available, then you're likely to be paying more than you need to for your gas and electricity, which will only stand to benefit the suppliers.

"There are some good fixed deals available, with a couple even coming with annual dual fuel bills of under £1,000, on average, so it's well worth taking the time to see if there's a better deal."

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The cheapest offers on the market today include Extra Energy Fresh Fixed Price October 2015 at £991 a year, First Utility iSave v30 October 2015 at £992 and Sainsbury's Energy Fixed Price October 2015 at £1,009.

Cryer highlighted that some households could actually be better off once their fixed deals come to an end, since the deal they took out was comparably expensive.

He said: "Those on the iSave Fixed v7 September 2014 dual fuel tariff could see a £6.57 reduction in their annual bills when they roll onto their provider's standard tariff called iSave Everyday."

And those in the same area currently on First Utility’s iSave Fixed v8 September 2014 tariff could save an average of £32.17 a year on their dual fuel bills. However, this doesn't mean that it’s a good idea for these customers to simply accept First Utility's standard tariff, as they may be able to save even more by shopping around and switching to another supplier.

Not on a fixed deal?

If you aren't one of the fixed deal customers with a soon-to-expire tariff it is still worth checking to see if you're on a competitive deal before winter kicks in. This is the time when thermostats get turned on – and up, lights are used more and bills start climbing.

It's worth checking a comparison site if you haven't switched for a few years. Key in what you pay now each month and your postcode and the best deals will flash up – with the cheapest first.

Experts estimate most people on a standard tariff could save a few hundred pounds a year by signing up to a cheaper deal.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.