Energy war rages on

The UK gas and electricity markets have seen much movement in 2007, with prices dropping across the board for the first time in recent years.

While some of the bigger providers announced price cuts in January, EDF Energy and Scottish Power waited months before following in their footsteps – but despite finally lowering their tariffs, they have been criticised for holding back for so long and then offering only meagre savings to their customers.

EDF cut only their gas prices and failed to offer any further savings on their online tariff – which is where customers can usually get the best deals and while Scottish Power did reduce the costs of both its electricity and gas it is still not very competitive.

Big Six

However, this now means that all of the “big six” energy providers, British Gas, EDF Energy, Npower, Powergen (visit www.powergen.co.uk), Scottish and Southern Energy and Scottish Power (visit www.ScottishPower.co.uk) have now reduced their prices in one way or another.

The reductions have come in response to falling wholesale prices which have dropped by around 50 per cent in the past year, allowing providers to pass some of the savings on to their customers.

While British Gas was at one time the most expensive provider, they are now the cheapest in many parts of the UK, having dropped their electricity prices by a total of 17 per cent and gas prices by 20 per cent this year.

Confusion

As welcomed as they are, the recent spate of price reductions have left many consumers unsure of which tariff or provider is best for them and since prices have only been reduced on selected tariffs it can be difficult to compare them.

Also, the advertised savings – which attract customers in the first place – are based on national figures and cannot be applied to all areas. For example, while British Gas (visit www.britishgas.co.uk) is the cheapest nationwide, this is not the case in every region – Powergen is the cheapest in London – so customers need to do a price comparison using their postcode to ensure that they get the best possible deal.

How to save

As ever, the most competitive prices are offered to new customers, so switching provider is the best way of getting the most from your gas and electricity. If you’re already with the cheapest provider in your area, there are still more ways to save.

Switching tariff, usually to an online option can be much cheaper. Everything from paying your bills to managing your account to entering your own meter readings is done online, so your provider saves money by cutting call centre and technician costs – savings that you can then benefit from. Online tariffs are paperless too so you’ll be doing a little bit more to help the environment as well. Check out the best online tariffs below:

If you don’t already pay your bills by direct debit then this is definitely something that you should do. Direct debit payments offer peace of mind by ensuring that your bills are always paid on time – as long as you have the funds in your account – so you won’t incur any late payment penalties. You’ll also save money each month by paying by direct debit.

If it isn’t broken, don’t fix it

While you might be tempted to sign up to a fixed-rate tariff to ensure that you continue to benefit from the recent price drops, you should hold off doing so for the time being.

These price drops have increased competition in the market and costs are likely to fall again later in the year. Fixing your rates now could mean missing out on even better offers later on and you’ll be unable to switch if your provider is no longer the most competitive option.

Shop around

Remember that the advertised savings that you could make are based on national figures, and on “average” users – usually 20,500 kWh of gas and 3,500 kWh of electricity per year, paying by direct debit.

To find out how much you could save, you need to do a price comparison which will take your individual usage into account, finding you the cheapest provider and tariff in your area. Use our Price Comparison Calculator to find the best value deal for your energy needs, and for more information on switching to a cheaper provider.