Colder weather has set in across the UK over the last week, with temperatures plummeting in many parts of the country to below 10°C.
The cost of energy bills will once again be high this winter, and without the support payment that was offered by the Government last year.
There is one simple change that could be made to save money on gas and electric this year. Here, i looks at how to switch your tariff and what the benefits could be.
What types of tariffs exist?
There are two main tariffs which dictate how much your gas and electricity bill will come to each month.
On a standard variable tariff, also known as a default tariff, the rate you are charged changes depending on the fluctuation of energy prices.
These rates are usually reviewed in January, April, July and October, to reflect the shifts in energy prices on the market. Different suppliers will charge different rates for their default tariffs, so comparing suppliers can be beneficial.
With a fixed tariff, the rate is frozen for the duration of your contract, which typically lasts 12 months.
There are also more specialised tariffs including time-of-use tariffs and “greener” options. “Green” tariffs are generally the most expensive.
What are the benefits of switching tariffs?
At the moment, most fixed deals offer a lower price than the standard variable rate.
However, this could change if energy prices drop – fixed rates do not change over the course of a 12-month contract, and if the energy price drops, you could end up paying a higher rate than what is going on the market.
If you want to be able to budget effectively for the winter months, a fixed rate allows you to do this since you know the rate you will be charged every time you turn the heating on.
Not every switch of tariff will automatically reduce your energy bill – some could increase it. It is important to check before you switch.
When considering a more specialised tariff, there are a number of personal energy use factors to take into account.
If you use more energy at night, for example, a time-of-use tariff could be the most efficient. These charge different rates at different hours of the day, with the peak rate often being during the day, and night being off-peak.
There are also electric vehicle tariffs available, which can be more efficient if you are charging a vehicle overnight.
Another type of tariff that can be beneficial to switch to is a dual-fuel tariff, where you receive one bill covering both gas and electricity. Since this means getting both services from the same supplier, they will often provide better deals.
How can I switch tariffs?
To check whether switching tariffs is a possibility for reducing your bill, you need to know which you are currently on. You can find your current tariff on your last energy bill or log on to your online account with your current energy supplier.
On most fixed-tariff contracts, if there are less than 50 days to go of your current rate, it is usually free to change. However, if there is longer to go, you may have to pay an exit fee.
A list of comparative prices of various tariffs and suppliers are available on the Ofgem website, which can help you make an informed choice.
There are pros and cons to each type of tariff, so the best thing to do is weigh up your personal circumstances against the aspects of each tariff.
