Switching Energy or Insurance Suppliers Isn’t Always Cheaper

Switching Isn’t Always Cheaper – Read Your Renewal
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Everyone has a month where it seems like every bill needs sorting out. Car insurance, energy, utilities, home insurance, it feels endless. For me, that month is September. This means I spend a lot of time on price comparison websites, looking to switch my suppliers, to find the best deal. This year, I felt like I encountered a glitch in the matrix – my renewal was cheaper than any deals I could find online! How could this be? Every consumer advice service tells you how much money you could save by switching. That isn’t a lie, but what should also be advised, is a reminder to check your renewal, especially when it comes to energy. Energy bills are slightly more complex to understand than something that is a flat fee, such as car insurance. An energy bill is generally made up of a fee based on how much energy you use, and an extra daily fee just for being connected. If you use Economy 7, you will have a separate rate based on how much energy you use during the day and during the night.

To Switch or Not to Switch? My Experience

A few days ago, I got a letter from my energy company about renewing my tariff. I didn’t really read it, I headed straight for compare the market. That’s my mistake, but a mistake I’m sure others make. I instantly assumed that it would be cheaper to switch, however, a switch to the cheapest tariff on the comparison site would have cost me more than renewing. It turns out that the energy company offered to keep me on the same tariff.

I have an Economy 7 tariff so there are three separate figures I need to compare to identify the best deal for me. Finding if a switch is actually cheaper is difficult to do without knowing how much energy you use. I’ve found that some energy suppliers will include this information on your bill, but it can calculated by using your meter readings. Take note that gas may be measured in different units and you will probably need to convert it to kWh. Once you have your energy usage you can multiply the offered rate by how many kWh you used and multiply the offered daily rate by 365. Sum these two numbers together to find out how much you would have spent if you were on that new offered tariff last year. Compare that to how much you spent last year on energy to find out if you will be paying more than last year. Take in to account that the renewal that your current energy supplier offers you may go up too.

To switch or not to switch? Finding the Best deal can be like navigating a storm
To switch or not to switch? Finding the Best deal can be like navigating a storm - Image by sethink from Pixabay

Price Comparison Sites Don’t Tell the Whole Switch Story

If there’s one thing I do not like about price comparison sites its the extra button you need to click before you actually see all the available tariffs. This is because the price comparison sites earn a commission for referring you to some companies, and the comparison site will help you switch to those suppliers. However, they have a button you can click to show you all available deals on the market, these may be cheaper, but the price comparison company will not help you switch to them. In my experience, these hidden offers are cheaper.

When using the price comparison sites, I always try to find one that allows me to enter my real usage statistics so that I get an accurate estimation for the cost. Some price comparison sites estimate your usage based off national averages and asking if you keep your home cold, cool, or hot. I have found these estimations to be inaccurate.

Inaccurate estimations on energy can be a hassle because it can leave you with a large bill at the end of your tariff. I experienced this when a price comparison site estimated my usage to be £30 per month. In reality, it was closer to £50 per month leaving me with a large bill of over £200 at the end of my tariff. Some energy suppliers would just increase your direct debit, but not all do. If you do not make yourself aware of this, and set the money aside, it could be a shock to you.

Checking for a Switch Is Essential

Fair enough, the language used by energy companies when they’re trying to entice you to switch to them is that you could save up to £X. However, a lot of people will switch based on whatever their favourite price comparison site tells them is the best deal, but this may not be better than what your old energy company is offering you. It’s always worth checking, but be aware that the gas doesn’t always burn hotter on the other side.

Do you use more than one price comparison websites and did you know that they don’t always show you the best deal? I’d be keen to know more about any experiences you’ve had when it comes to a switch on your bills.

Andrew

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2 thoughts on “Switching Energy or Insurance Suppliers Isn’t Always Cheaper

  1. Energy company shopping can be so stressful and confusing! We way underestimated with our new house, so now we’re overpaying per kwh. Can’t wait to start looking at those rates again with real estimates.

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