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.

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By Lucy Tobin

London Evening Standard – 6.10.10

The Government’s Comprehensive Spending Review later this month is going to hit our pockets in myriad ways — but perhaps the most surprising is a predicted rise in the cost of home insurance.

Insurer the AA is warning any cuts in spending on flood prevention will force up the cost of home cover, as well as leaving some households uninsurable. And it’s not just seaside or Thames-side homes affected: the overall higher risk will hit all policies, according to Simon Douglas, director of AA Insurance.

He has written to Environment Secretary Caroline Spelman, saying: “Insurers are concerned about future flood and storm damage claims which are likely to become more frequent and more severe as the climate warms and they will need to increase reserves to be able to pay out for large numbers of future claims.

“If investment in defences — and that includes ensuring storm drains are kept clear and are improved to remove surface water — is not maintained, insurers will become increasingly fussy about who they insure and premiums will inevitably increase.”

The UK home insurance market is unique in Europe in that it automatically includes flood cover in all policies.

Types of home insurance

First, check what kind of policy you’re shopping for. There are two types of home policies: buildings insurance, which covers against accidental damage that leads to building work, such as fires, subsidence or flooding, and contents insurance. Anyone with a mortgage will have to take out buildings cover under the terms of lenders.

But contents insurance is optional and can be taken out by owners or renters. It protects possessions inside the home from theft or damage, or you can usually pay extra to get the goods covered outside the home too. If you do so, be sure to avoid “double insuring” — there’s no need to buy a mobile phone insurance policy, for example, if your handset is covered under contents insurance.

If you’re buying both, note that it’s usually cheaper to buy one combined policy than two separate ones.

In other nations, flood cover is purchased separately — and there’s a possibility that British insurers could follow suit. But in the meantime, while it’s getting tougher to slash home insurance costs, a little effort can still reward you with savings.

Rising costs

The most recent Budget saw the insurance premium tax go up to 6%. That will kick in during January, but home insurance costs are already up on this time last year. Industry giants have hiked premiums, blaming last year’s severe flooding in the UK. RSA, which owns the More Than insurance brand, recently raised its rates by 4 per cent on home cover, and Aviva also put up premiums.

Figures from the AA show the average cost of buildings insurance is 13 per cent higher than the same time last year, while the cost of contents cover has risen by only 6 per cent over the same period.

Money-saving tips

Shop around for quotes. Online, comparison sites like Moneysupermarket.com and Confused.com allow you to get a quote from several providers at once, but remember to check with other sources too as not all insurers are signed up to these sites.

ONCE YOU’VE DONE THAT… CALL ME!

WHY?

BECAUSE I GUARANTEE TO BEAT ANY EXISTING QUOTE ON A LIKE FOR LIKE BASIS

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