Malcolm Kyle

With four of the 6 Utility companies hiking their prices recently – and I’m not sure just how justifiable that is, it makes sense to ensure you’re taking steps to minimise the cost of heating and lighting your home this Winter.

Here are 5 steps that may help you decide the best course of action.

1. IF YOU HAVE NEVER SWITCHED PROVIDER, YOU ARE PROBABLY PAYING FAR TOO MUCH

Energy suppliers have a huge number of price plans, but the most expensive of all is usually the “standard” tariff, which involves the supplier sending you a printed bill at the end of each quarter which you then pay. Anyone who has not actively switched to a new plan will be on this tariff.

Customers who switch from a standard tariff to a best-buy price plan stand to save about 30%, which is equivalent to about £300 a year for a typical household, such as a three-bedroom semi-detached house with gas-fired central heating.

2. IF YOU LAST SWITCHED MORE THAN A YEAR AGO, YOU COULD PROBABLY SAVE BY SWITCHING AGAIN

Today’s best-buy tariff will typically become a little less competitive in 12 months, when the supplier brings out a new version in a bid to attract new custom. It will keep repeating the process year on year, until it is not much better than the standard tariff.

All Energy tariffs have life cycles. They can start out as the best deal on the market, but gradually end up saving you very little money. In a somewhat cruel way this is how suppliers punish customer apathy.

3. DON’T LET THE HUGE CHOICE OF TARIFFS PUT YOU OFF

There is a vast array of different price plans on the market. Which?, the consumer group, found recently that for an average household in the East Midlands there were 89 different tariffs available for gas and electricity where payment was by direct debit.

All these tariffs fall into one of three basic types:

1. expensive standard ones
2. cheaper online variety and,
3. fixed-rate deals.

Better still, you do not need to investigate every tariff on the market to work out which is best for you; a quick call to me and I will do all the legwork for you.

4. YOU DON’T HAVE TO SWITCH TO MONTHLY DIRECT DEBIT TO SAVE

The very cheapest tariffs will require you to pay by monthly direct debit, and the monthly amount, which is variable, will be decided by the supplier on the basis of actual and expected consumption. But if you prefer to know how much energy you have used and how much it cost before you pay the bill, it is still possible to find a tariff cheaper than the standard one.

Take a typical household in London. The cost for someone who has never switched will average about £1,166, while the cheapest tariff, EDF’s Online Saver 7, would cost £867, a saving of just under £300. If you don’t want to pay by monthly direct debit, EDF is still the cheapest at £938 – a saving of £228 compared with the standard tariff but £71 more expensive than the direct debit option.

5. WATCH OUT FOR THE CATCHES

Some tariffs come top of comparison sites’ tables only by virtue of rebates that you receive after a year. But as prices are variable, the price could rise before then; if you switch again you will miss out on the rebate, meaning that choosing a different tariff at the outset would have been cheaper.

Watch out, too, for charges to leave a tariff. Most discounted tariffs have an exit penalty and the best tariffs are often open to new customers only. Switching to the best deal will normally involve going to a new supplier, so you need to understand what works best for you. However some deals are available to existing customers, such as EDF’s best-buy Online Saver 7. Also, if your supplier won’t switch you to its best deal when you call – call centres often won’t offer online tariffs  – try switching via its website, or via a comparison site, instead. Or if you can’t face all the hassle, let me take the strain for you!

If you move to a new home, you will start on the energy company’s standard – ie expensive – tariff by default, even if the previous owner had switched to a better deal or you had done the same at your previous address. If that’s you, act straight away and give me a call or drop me a line.

Remember that in the vast majority of cases dual-fuel deals are better than buying separately.

Finally, a personal plea: NEVER, EVER sign up to a doorstep deal. They may be perfectly decent people just doing a job but they are simply never going to offer you a deal that’s best for you. They work on a commission only basis and will always try to sell you a deal that’s best for them, not you.

Continue Reading

Ofgem is to investigate Britain’s energy companies over possible profiteering after noting a sharp increase in family bills. Analysis by the Watchdog, which regulates gas and electricity markets, said net profit margins of £65 per typical customer in September was now £90, which was the equivalent to a 38 per cent rise.

The fast-track review, which will investigate whether consumers could be better protected, will take into account the recent price rises announced by three of the “big six” suppliers in recent weeks.

British Gas, Scottish & Southern and Scottish Power have all recently landed customers with higher annual bills.

They blamed the increase on the cost of wholesale energy prices, which have risen more than 25 per cent.

Alistair Buchanan, Ofgem’s chief executive, said: “With Britain facing an investment bill of £20bn over the next 10 years, consumers have the right to expect that the energy retail market is providing them with value for money. Our analysis published today shows an increase in company margins from £65 to £90 at a time of rising energy prices, which causes Ofgem to rightly ask if companies are playing it straight with consumers.”

“The energy retail market can only be fully effective if consumers have confidence that the market is transparent and easy to take part in,” he said.

“So we will go beyond our usual quarterly reports on prices and do a comprehensive review of the retail market and our recent reforms from the consumers’ perspective.

“Greater transparency in the market is good for consumers, investors and for the energy industry as a whole.”

Last week ScottishPower became the latest energy giant to up its prices, landing some customers with an annual increase of £138. The company, which has 2.5 million customers, said it was putting up its gas and electricity prices, which came into effect on Thursday.

It was raising gas prices by 2 per cent, and electricity prices by nearly 9 per cent, adding £54 a year to a customer buying both. This will take those paying the standard tariff to £1,357 a year, the most expensive on the market.

Earlier this month British Gas announced that its eight million customers also face higher fuel bills after the power giant announced it is increasing its prices.

Households will see their gas and electricity bills climb by an average of 7 per cent from December 10. It will add an additional £1.50 on a typical weekly dual fuel bill, which equates to £78 a year.

Scottish and Southern Energy said it would put up its domestic gas tariffs by 9.4 per cent from next month.

EDF has promised it will freeze its prices until after the winter. The remaining major suppliers, npower and E. ON have not commented on their plans, but are widely expected to follow suit.

The Ofgem inquiry will be completed by March next year.

The regulator’s last major investigation into the retail market in October 2008 found no evidence of anti-competitive behaviour but found 4.3 million customers without gas who had no access to the best deals on offer from providers. However, Ofgem did implement new guidelines at the time to prevent unjustified price differences, set out new standards of conduct on the level of service for consumers and tougher rules on sales and marketing as well as new rules to allow more people who are in debt to switch supplier.

Continue Reading

British Gas today announced it is putting its prices up by 7% for both gas and electricity from 10 December, making it the second major energy supplier to raise its prices in recent weeks. The increase will affect around 8 million customers, adding £53 to annual gas bills and £29 to electricity bills

British Gas customers on a standard dual fuel plan will see the extra £82 push their total bill from £1,157 to £1,239, according to uSwitch.com. The company said rising wholesale prices had forced it to increase its prices, but fixed-price customers and 300,000 vulnerable customers on the firm’s Essentials tariff would not be affected until the end of the winter.

Late last month I reported that Britain’s second-largest energy supplier, Scottish and Southern Energy (SSE), said it was increasing its gas prices by 9.4% or £67 from 1 December. Now following British Gas’s announcement, consumer watchdogs fear a full-scale increase in energy prices could be on the cards, although EDF Energy said it would freeze its standard tariffs until March 2011.

British Gas’s managing director, Phil Bentley, said: “We know that rising energy prices come at a difficult time for many in Britain. That is why we are not raising prices for our vulnerable customers, such as the poorest pensioners, until after this winter. We will continue to give them extra help – including lower rates – saving each an average of £128 a year.”

British Gas and other suppliers respond to forward energy prices, which is of course their argument that price rises are needed. However, wholesale prices are around half of their peak in 2008, and yet customer’s prices were cut by less than 10%. So I wonder why is it that the suppliers didn’t make cuts when the conditions allowed for it?

It seems to me that UK consumers are now facing an extremely bleak winter and I’m urging my clients to let me examine whole market options for them, to see where I can save them money.

Continue Reading

It’s going to be a cold and expensive winter, as energy providers start to raise prices three months before previously predicted.

The Daily Telegraph reported last week, that Scottish & Southern Energy (SSE) announced that it was raising its prices by nearly 10pc – just in time for Christmas. From December 1, SSE is putting up its gas prices by an average of 9.4pc per customer, which equates to an extra £67 a year. The increase will affect 3.6 million households, and has prompted fears that other utility companies will follow suit.

Though the price rise is not a shock to those in the industry, it is earlier than expected.

In 2008, energy bills rose by 42pc. This cost the average household an extra £391 a year. Though energy prices are still a long way off the peak of £1,259, reached in January 2009.

From December, the average household energy bill could top £1,200. For many, bills are already in the realms of the unaffordable – any increases will simply see more people forced to think long and hard about whether to heat their home or cook a meal.

The SSE increase announcement comes less than a month after EDF Energy increased electricity prices for 1.2 million households, saying they were passing on distribution costs.

There are two key steps to keeping control of your energy bills:

1. Use less energy by making your home more energy efficient
2. Move to a competitive energy plan so that you pay less for the energy you do use.

The difference between the cheapest energy plan on the market and the most expensive is substantial and will make a real difference to everyone but in particular for those who are worried or struggling with bills.

40pc of our annual energy consumption in used between December to February, so not being on the right plan before then can be costly. Many households previously on cheap deals may find they are now paying top rates, as previous fixed rate deals have expired.

Before switching your provider, you should make yourself aware of your current energy usage, especially at a time when your energy consumption is drastically changing as you switch on lights earlier and turn up the central heating.

Most energy bills are based on estimates, and changes in use can mean these estimates are incorrect. It is important to arrange regular meter readings, and actually read household bills when they arrive in order to correctly determine what the right deal for you is.

You will not be able to switch to a better deal if you have outstanding debts with your current provider, and equally if you have overpaid you will want to reclaim this.

The best deals on the market are dual-fuel online deals that are paid by direct debit. Any measure that reduces administrative costs for the provider will generally be passed on as a saving to you.

If you are interested in changing your supplier, I will gladly use our whole of market search tool to ensure you find the right deal and energy provider for your needs

Of course, switching providers is not the only way to keep household costs down. Being economical with energy usage costs nothing, is easy to do and has real results.

Introducing simple measures such as draught proofing, only boiling the required amount of water in a kettle, using pan lids when cooking and using the right size gas ring – it should just cover the base of the pan – all reduce monthly bills.

Continue Reading

If you’re signed up to a contract with a utility provider, watch out for an annual rip-off…

I regularly tell my BNI colleagues about how careful you need to be when it comes to renewing your insurance policies. After all, when a letter arrives on your doormat to warn you that your home insurance is coming to an end and you need to renew, it can be far too easy to simply accept the new quote without bothering to shop around.

However, if you decide to do this, it’s very likely you won’t be getting the best deal on the market. In fact, many insurance companies only offer their best deals to new customers and will actually boost your premium in the second year, hoping you won’t get around to switching to a different insurer.

That’s why I frequently encourage my members to tell me in plenty of time when their insurance is due and I will go to the market, to search out the very best deal for them and their current circumstances.

Unfortunately, however, when it comes to other important expenditure, such as your household utility bills, suppliers are coming up with more devious ways to make it harder to get out of your contract when it’s coming to an end.

The great rollover rip-off

A recent report in the Telegraph revealed that energy providers are automatically rolling customers onto new deals without consulting them.

Many people have signed up to deals that last for at least a year, and when those deals come to an end, you should expect to receive notice – preferably in writing.

Yet despite companies claiming they do inform their customers before they roll over contracts (to give you time to cancel the contract before it renews), in some cases, only emails are being sent out and these can easily get lost or classed as spam and end up in your junk folder, meaning you never see it. Even when a letter is sent out, the terms and conditions of the contract are usually buried somewhere in the small print, making them easy to miss.

But it’s not only the fact that companies are being sneaky about telling their consumers when their deal is coming to an end that annoys me, it’s the fact that if a consumer then chooses to opt out of the deal, they will find that it may come with a hefty penalty!

The penalties

For example, if you are signed up with British Gas and have locked in to one of their fixed tariffs, you’ll be charged £35 for electricity and £35 for gas if you want to get out of your contract early, unless you cancel within the 28-day cooling off period. Which means if you’ve automatically been rolled over into a new contract and haven’t spotted this in time, it can be expensive to get out of it.

British Gas are not alone of course, others such as Scottish Power charge £30 for electricity and £20 for gas if you cancel your tariff.

Here’s what you can do about it.

Information about termination fees is often buried in complicated small print or ends up in your junk email box, so it’s really important to ensure you fully check any correspondence you receive from your energy provider and give your junk email box a once-over every so often to ensure there’s nothing important in there.

What’s more, before you sign up to any kind of contract, you should ensure you know exactly what you’re signing up for. Check the terms and conditions carefully so you know when your contract comes to an end, whether it will automatically rollover, and what the penalties are for leaving early.

If it’s not clear in the terms and conditions, phone up and ask. It’s also a good idea to find out what your rights are in terms of cooling off periods. Generally, you’ll find you have a month to get out of your contract before any charges will be implemented. It’s really important to be clear about this to ensure you don’t get caught out. Unfortunately, websites for utility providers can be hard to navigate around and details difficult to find.

If you’re signing up to a contract, it’s a good idea to set a reminder on your mobile phone or make a note in your diary to warn you a good 6 – 8 weeks BEFORE your contract is coming to an end. That way, if you don’t want to renew your contract, you can tell your supplier before they automatically renew your contract – and before you get charged.

Don’t forget that even if you’re in a long-term contract, you don’t have to stay locked into it forever. Providing you know when your deal is coming to an end, you can make sure you’ve done some research beforehand to find out whether it’s still offering you the best deal on the market. While fixing your energy tariff for a year can bring peace of mind, it’s important to remember that once that year is up, there may be a much better tariff out there for you.

I set reminders for ALL my clients to ensure they don’t get caught out. Tariffs change on a daily basis and the best deal today, may not be the best deal in 10 months time!

Continue Reading

The weather may be balmy but winter is on its way, bringing increased costs for many. Now is the time to get your home and finances ready for winter, to avoid sky-high energy bills and a chilly and expensive season indoors.

The gas and electricity regulator Ofgem is predicting that energy prices might rise as much as 13 per cent by spring, while long-term forecasters are predicting a cold winter. Temperatures could dip as low as minus 20 Celsius.

However, there are plenty of things you can do now to prepare yourself for the big freeze, so follow the checklist below to make sure you are ready.

SWITCH YOUR ENERGY
The biggest change you can make to winter’s energy bills is by making sure you are on the cheapest tariff for gas and electricity. This won’t make any difference to the quality of the energy supplied to you, but it could make a vast difference to the cost.

The average customer can save more than £250 over the course of a year just by switching energy companies, while if you’ve stayed with the same gas and electricity company for many years you could save far more. Now is a good time to consider switching, since deals are being put together to lure customers in.

It’s important that you do a proper price comparison, however, rather than being dazzled by cashback offers. A good way of doing this is to call me or fill in the contact form, as I can check on the best deals for you against the whole of the market. Please have your monthly bills ready, since I’ll need this information to calculate which tariff is best for you.

Make sure you’re aware of what you are signing up to, since tariffs have different and confusing names, and many also impose charges if you want to leave early. It is possible to fix your energy for several years if you prefer certainty, and although the deals are slightly more expensive than the cheapest deals, you may end up saving more in the long run.

Paying by direct debit will give you the best discount, and you may be charged less still if you pay your bills online.

DEAL WITH YOUR BOILER

Before the cold snap really hits, it pays to have your boiler serviced. The savviest people do this in the summer, when companies offer special deals, but even if you do it now your boiler should run more efficiently, saving you money.

If you buy boiler insurance cover you may get a service with it – however, this has risen by as much as 20 per cent since last year and now costs between £150 and £200, so it pays to check whether you really need it.

It is possible that you may already have your boiler covered by your home insurance policy; check before signing up to anything. Often it is covered but limits tend to be relatively low.

In reality, you may just want to pay for boiler repairs as and when they arise. Bear in mind that if you already have a new boiler, you may already be covered by a warranty.

If your boiler is really old and does need replacing, it may pay to do it sooner rather than later. The Energy Saving Trust calculates that the difference between gas bills from a home with an old boiler to one with an ultra-efficient new one is as much as £225 a year for an average three-bedroom semi. Getting a new one sorted before winter kicks in could be sensible if you know that yours is on its last legs.

SEAL YOUR HOME

There’s no point in spending money heating your house if what you are actually warming up is the whole neighbourhood, so make sure your home is as insulated as possible. According to the Energy Saving Trust, cavity wall insulation is the most effective energy-saving measure you can take.

This simple measure, which involves injecting foam into the gap between your walls, can save £110 a year. There are grants available for installing this, especially if you are over 60. Try the Energy Saving Trust’s grant search tool onwww.energysavingtrust.org.uk or if you live in certain areas of the UK there’s an excellent grant scheme available from Warm Front www.warmfront.co.uk

Loft insulation, which saves around £40 a year on the average house, can also be installed at a subsidised cost, if you can get a grant. Most homes have some loft insulation, but normally fall short of the recommended level of 220mm.

BLOCK YOUR DRAUGHTS

You can also increase your winter comfort factor by blocking draughts, especially if you have single-glazed windows. Just fitting draught stripping across your doors could save you £25 this winter. Even when the figures sound unimpressive, don’t underestimate the extra comfort that thick curtains, draught excluders and other cheap measures can bring.

Rosalyn Dungate, of the Energy Saving Trust, suggests blocking cracks between floors and skirting boards with material, paper or decorator’s caulking, a cheap home-made solution that could save money and make life far warmer.

Plenty of heat is also lost through your chimney if it is open, so if you’re not having fires, try using a chimney balloon to seal it. These are easily deflated and removed.

MONITOR YOUR USAGE

Finally, if you want to keep on top of spiralling costs, consider an energy monitor. Some companies, such as E.on, are giving these out free to customers; or you can buy one from around £25.

These can be attached to your electricity meter, and can act as a powerful incentive to switch off lights and appliances by showing you exactly how much your usage is costing.

Studies suggest you could save five per cent of your electricity bills by using one, although of course this is a behavioural saving- you won’t get cheaper bills just from looking at the monitor.

Sadly, these do not yet exist for gas meters.

Continue Reading

By Richard Tyler
Published: 6:30AM BST 12 Oct 2010
Telegraph.co.uk

Households and businesses can now claim up to £200 a day of compensation from electricity companies if they fail to carry out connections and repairs when they say they will.

The new regime, introduced by regulator Ofgem, is the first time homeowners, property developers and businesses trying to connect to the grid have been able to bill the electricity network operators for damages. Ofgem said “poor” customer service levels had driven the changes.

The reform comes as Grant Shapps, housing minister, will tell home builders today the Government is “on your side”.

“I am determined to make it easier to build the homes this country needs,” he is due to say in a speech in London.

House builders said Ofgem’s compensation regime had been a long time in coming. Ray Farrow, an adviser to the House Builders Federation, said: “We have been pushing for this for four years and we now have some guaranteed standards and fines. They are small amounts of money in terms of the delay that occurs but it’s still a move in the right direction.

“It places the onus on the electricity company to really work with developers to facilitate the process. In the past it’s always been the developer on the back foot.”

Payments range from £10 a day when companies fail to provide quotes on the cost of connecting a home within an agreed time frame to £200 a day for industrial customers being let down.

Ofgem has acted repeatedly against poor customer service levels. Last year, the watchdog fined EDF £2m for breaching a separate set of connection standards.

Continue Reading