Home energy bills have doubled for many households over the past decade, and the costs of gas and electricity have risen far above the rate of inflation. There are many reasons for this, including the rising cost of raw materials used to generate electricity and the increasing costs of distribution networks. Gas suppliers rely on wholesale prices, and increases are generally passed on to the consumer directly. UK gas suppliers are increasingly reliant on global energy markets as North Sea gas supplies are now extremely low.
Rising energy costs have had a particularly severe impact in the UK due to increasing rents, rising food prices and other strains on the household budget. Finding the cheapest gas and electricity suppliers has become essential for many people. Energy companies have been criticised for increasing prices and for not making tariffs clear to customers, but they operate in difficult markets and are generally committed to fair pricing.
The following four step process will help you to reduce your home energy bills.
Understand Your Energy Bills And Pricing
The first step to getting a fair deal on gas and electricity is to understand how your energy bills are calculated. Most UK energy suppliers apply a standing charge on a daily basis. The standing charge is a fixed amount which pays the costs of supply and the maintenance of metering and distribution. Standing charges vary by region and how you choose to pay for your energy. The total cost of your energy is a combination of your energy tariff and the standing charge.
Energy tariffs can be confusing to understand, but it’s worth investigating the best option for your household. Fixed energy tariffs can protect you from sudden price rises, and are great for people who like to manage a stable budget without nasty surprises. Capped tariffs are a little higher than standard, but they guarantee energy bills won’t rise above a certain level. Some suppliers also offer green tariffs, special rates for customers who manage their accounts online and dual fuel tariffs.
British Gas offer a ‘Clear and Simple’ tariff designed to reduce confusion. The company’s website includes an online calculator which allows you to select your energy type and area to see a breakdown of tariffs depending on your payment method. The calculator also displays typical monthly bills based on an average energy user.
Contact Your Suppliers To Switch Tariff Or Payment Method
Once you understand your energy bills, you can make an informed decision about the best tariff or payment method. Switching to monthly direct debit payment is often the quickest way to reduce your annual energy costs.
Ask your suppliers about fixed and capped tariff options, and make a note of the options available. Fixed rates are typically available for one or two years, and your personal circumstances will determine which is best. Households with a tight budget may choose to fix prices for a longer period to reduce the risk of price rises.
Compare The Market And Consider Switching Suppliers
The third step in finding the cheapest gas and electricity suppliers in the UK is to shop around and compare companies. Your existing suppliers may be able reduce your bills by switching your tariff, but competitors may offer even better deals.
There are thousands of tariffs and deals to compare, and this step is daunting for many people. Fortunately, most of the work is now done by online comparison services, and it’s possible to find the best rates in a couple of minutes. As well as the established companies such as Southern Electricity and British Gas, there are many new competitors keen to attract new customers.
Switching gas and electricity suppliers is an easy process, and most companies have customer service teams dedicated to the task. Don’t be put off by switching, as you may be able to reduce your home energy bills by hundreds of pounds.
Review Prices Every Three To Four Months
The UK home energy market is extremely competitive, and there are new deals and offers appearing all the time. If you have opted for a fixed tariff, penalties will apply if you switch before the period expires. However, there’s nothing to stop you switching several times a year if you aren’t locked into a contract period.