Savings to be made on gas and electricity are on the increase.
There's only one person who makes me feel like a hack, and that is Florian Ritzmann of Xelector.
In virtually every one of my articles, I do all my own commentary and analysis, and I come up with my own ideas. However, Ritzmann is one of the few commentators who comes to me with original ideas and quality data that is reliable enough for discerning Fool readers.
But, as one politician said recently: 'What sort of idiot, when they hear a good idea, doesn't take it on board?' So, thanks to Ritzmann, this article has practically written itself.
How is the energy market?
I'd like to take stock of the gas and electricity market now that all the major energy suppliers have increased their prices.
Prices have gone up by 14% in the past three months. Average prices have gone up by about £150 per year:
Recent price increases by supplier
Supplier | Gas increase (%) | Electricity increase (%) |
|---|
British Gas
|
15
|
15
|
EDF Energy
|
13
|
8
|
E.ON
|
15
|
9
|
Npower
|
13
|
17
|
Southern Electric/Scottish Hydro/Swalec/Atlantic
Electric and Gas
|
16
|
14
|
ScottishPower/Manweb
|
15
|
14
|
As you can see, the changes are quite uniform. This is because all the suppliers' increases, on this occasion, reflect surging gas and electricity wholesale cost (the price at which energy suppliers buy energy in bulk).
Those of us who have not switched suppliers before can now expect to spend £1,017 to £1,050 per year for our gas and electricity.
What now?
There are some very entertaining parodies (both in books and on the Web) about sites such as The Fool. These spoofs advise you to do such things as: 'Switch once a year to save hundreds. Better yet, switch every 20 minutes and you'll save millions!'
And there is some truth to the spoofs; the message is too often repeated. But the thing is that you will undoubtedly save a lot of money if you've never switched before, and you are very likely to save if you compare prices once a year.
The potential for savings is actually better now than it was at the beginning of the year, despite the increases. This is because suppliers are actively competing with each other, trying to win new customers with discounted rates.
Savings have developed in the past three months
The average savings presented to users of The Fool's comparison service in early January was £163, with high-energy-usage customers able to save around £450.
Since then, the average saving has increased to £202 per year, with the savings for high users as much as £503. One of my colleagues just switched to a tariff that should save him around £600 a year, for example!
So all is not lost and it is possible to claw back at least some of the recent increases, if not all of them.
A couple more tips
You might not have to actually switch supplier to get the best savings. British Gas and Npower have made their cheapest tariffs available to their existing customers.
If you are with either of these companies you can upgrade your account almost instantly through The Fool's energy tool. Type in your details, look for their cheapest tariff and apply.
Also, when looking to switch, check out the prices for gas and electricity by themselves (i.e. single fuel) as well as combined. You may find it's cheaper to split your suppliers.
> Read Are Gas And Electricity Comparisons Accurate?
> Hear Ritzmann in our latest Money Talk podcast.
> Read 4 Original Tips To Reduce Your Energy Bills.
> Compare prices.
