Updated: Monday 9 July, 2012
By Martin Fagan
If youíre seriously looking to save money on your energy bills, the easiest way to do it is by switching to a cheaper deal. However, not many people do. Energychoices.co.uk looks at why you should switch supplier, how easy it is to switch and how much money it could save you.
Itís become an inescapable fact of life that energy prices increase. However, over the last few years, energy prices have shot up like the proverbial rocket.
Since 2004, the cost of energy has risen five times faster than household incomes. In 2004, households were spending an average of £522 on energy, according to figures from uSwitch.com. Today, the average household energy bill is £1,252 a year. In 2004, energy accounted for 1.6% of household income; today this has doubled to 3.2%.
For many households trying to stem the tide of rising bills, the obvious solution is often ignored - save money by switching to a different energy supplier offering a cheaper tariff.
Switching supplier is very easy and there are numerous benefits. As well as saving money, you could also save energy - and the planet - by getting your electricity from renewable sources such as wind and wave power.
Switching will save you money not just because some energy suppliers are cheaper than others, but also because the best deals are invariably offered to new customers.
Providers reel you in with flashy deals and then, once the offer is no longer so competitive, rely on customer inertia making sure you stay put . However, if you regularly check the energy market using a comparison site like Energychoices.co.uk, you can ensure that you always pay the lowest price possible for your gas and electricity. According to consumer watchdog Which?, households who switched to a duel fuel tariff between June 2010 and May 2011 typically saved £237 a year on their energy bills.
By switching to a package where you pay your bills by direct debit and take paperless billing - where your bills are emailed to you instead - you will save even more. Online account management has another advantage too - it allows you to submit your own meter readings via the internet, eliminating the estimated billing process that can often leave you overcharged.
Switching provider could also get you a better standard of customer service, extra features and savings on dual fuel or online-only tariffs.
You might have read that a particular energy provider is the cheapest on the market, , but the price you pay will actually depend on where in the UK you live. So, the cheapest deal offered by any particular supplier might not actually be the cheapest for you.
Therefore itís important to shop around before making a decision and using an energy price comparison calculator like Energychoices.co.ukís allows you to find the cheapest provider for your postcode.
You can also compare boiler cover at BoilerChoices.co.uk, enabling you to find the best deal on protecting your boiler and central heating system.
Most people can switch energy suppliers, even if they have a prepayment meter and even if theyíre in debt with their current energy company, as long as the debt doesnít exceed £100.
If you use a switching service like Energychoices.co.uk, all you have to do is choose your new provider and submit some personal details. These will be passed on to your new provider who will be in touch with details of your switch.
You donít have to contact your old supplier, but to ensure the smoothest of switchovers you should give them 28 days notice of your switch, which you might want to put in writing too.
To make the comparison a valid one, before comparing deals youíll need some details about your energy consumption, which you can find on your bill. The bill should tell you how much you spend a year on gas and electricity, either in cash terms or in kilowatt hours (kWh).
Make sure that you have cleared any outstanding bills with your existing provider as a debt in excess of £100 or cancelling and then reinstating the direct debiton your energy payments might prevent you from switching.
You should take a meter reading on the day of your switchover as you can then compare it against the final bill from your old provider and use it as a starting point for bills from your new provider.
After your switch has been completed, you should also check the meter number to make sure that youíre being billed for the correct meter.
It usually takes between four and six weeks for your switch to take place and after you sign-up youíll receive a letter from your new supplier notifying you when the switch will happen.
Your old supplier will send you your final bill - marked ďfinal billĒ - and after that youíll only receive bills from your new energy supplier.
Switching your energy supplier doesnít cost a thing. You will have to budget for your final bill from your old supplier, as if you pay by standing order (a fixed amount each month rather than the variable amount of a direct debit) there might be a shortfall between what youíve paid and what you owe. On the other hand, you might have been paying too much and could be pleasantly surprised by a refund.
The potential savings that can be made are more than worth the small effort it takes to switch - simply by spending 10 minutes online you could slash your energy bills by a significant amount.
When youíre looking for your new provider you should think about the way that you pay your bills as well as how much they are.
If you pay by prepayment meter then you stand to save the most by switching to monthly direct debit. According to the energy regulator Ofgem, prepayment customers in some parts of the country stand to save as much as £170 a year by switching.
You should also check with your new energy provider to see if they offer any grants or discounts on energy efficiency. Many do and, combined with other small changes around your homesuch as cavity wall insulation or maybe a new boiler, could push your yearly savings up even more.
Switching is a fairly pain-free way to save money on your energy bills, but switching levels remain low and are falling. According to Which?, two-thirds of its members have never switched their energy supplier.
According to the Department for Energy and Climate Change (DECC), the number of households switching their energy supplier continues to fall. After reaching an all-time low in 2011, figures from the DECC show a 25% decline in the number of people switching electricity providers in the first three months of 2012 compared to the same period in 2011, while gas transfers dropped by 33% in the same period.
With energy suppliers routinely launching new plans and tariffs, even regular switchers should run a comparison every six months - or ahead of their current tariff expiring - to check they're still on the best deal.
So, save yourself some money and donít let inertia be your enemy - grab an old energy bill and compare prices to find out if you should be switching energy supplier.