In the next month, households across the UK will see their energy costs drop, as the big six suppliers – British Gas, E.on, EDF, Npower, Scottish Power and SSE – lower their prices ahead of the Ofgem price cap. However, according to Martin Lewis this might not help you save money on energy bills.
The price cap comes into effect on the 1st October and will see the maximum price that suppliers can charge for electricity and gas fall from £1,254 to £1,179.
This might sound like good news for households looking to save an extra £75 a year. However, Martin Lewis’ warns households not to become complacent as a result.
He advises instead households should look into other tariffs to save money on energy bills. By switching between the Big six, customers could make even bigger savings – up to £260! All they need to do is shop around for the best deal.
Save money on energy bills
The Money Saving Expert says, ‘11 million people who used energy on the standard tariff are getting letters saying the price is going to be cut,’ he explains. ‘For some the typical use is going down from £1,254 a year to £1,750 a year from the 1st October because the price cap is being lowered.’
‘Sounds good, but that is still massively expensive,’ he points out. ‘Most of those same big companies will sell you the same gas, same electricity for less if you swap tariff.’
He explains that if you are with British gas – the cheapest energy company of the big six – this week they dropped the price of its one year fixed tariff to £949. That works out at £260 cheaper on typical use than the standard tariff.
‘But don’t ask, don’t get, and you can’t ask it directly. You have to do it on a comparison site,’ the money guru advises. ‘Existing customers you can do this, so don’t sit on your hands and get a false sense of security. Do a comparison!’
Websites such as uSwitch.com or Energyhelpline.com will help you compare tariffs and find a cheaper deal. If you do find a better deal, it is always worth telling your current provider to see if they can match it. Haggling cost nothing, and if they can’t match it you have a deal ready to switch to.
Don’t be swept up in the excitement of your current energy deal dropping. Follow Martin’s advice and make sure you are getting the most for your money.