More than two-thirds of commercial electric price comparison consumers could save money on their energy bills almost immediately by switching suppliers, according to the Energy Advice Line.
Julian Morgan, managing director of the price comparison, switching, and advice service, said about 68% of energy users have never changed supplier and were almost certainly paying more than they needed to. "Everyone involved in the energy market - OFGEM, the government, and consumer groups - agree that the easiest and cheapest way for consumers to cut their energy bills is by changing supplier," Mr Morgan said.
"Yet, despite this, the vast majority of consumers stick with the same supplier year after year and in the process, they lose out. Many people think that changing suppliers is too hard, but it's actually not difficult at all. Other people think that there might be a disruption to their supply if they change providers, but that's not true either. With energy prices ever rising, consumers need to take control of their energy arrangements. But they don't have to do it on their own because there is help available."
Mr Morgan said the average dual gas and electricity bill stood at a record £1,353 a year - up by 65% over the past five years - highlighting how important it was for consumers to find a deal suited to their individual circumstances.
- Fixed rate tariffs protect consumers against future energy price rises for the duration of the deal, ranging from 12 months to 4 years. These deals give consumers security, as there will never be any shock price rises. The downside is that if a supplier reduces its prices, consumers on fixed deals don't benefit.
- Variable tariffs usually start off cheaper than fixed deals but suppliers can raise or lower their prices whenever they want for the duration of the deal. Consumers can switch from a variable to a fixed deal if they want to, but some suppliers - although not all - charge early exit fees. It's a good idea for consumers to find out about these exit fees before they sign up to a variable deal.
Mr Morgan said that comparing energy tariffs could be complicated, which was why it made sense to seek the help of a reputable price comparison and switching service. However, energy firms had recently been forced by OFGEM to present information in a simpler format. Bills are now broken into two separate rates; a flat rate for gas and electricity used, and a separate daily standing charge to cover the supplier's administration costs.
"Households that use a lot of gas and electricity might want to have a higher standing charge and a lower rate, but for those whose usage is low but want a tariff with a cheaper standing charge," Mr Morgan said. "How to pay energy bills is also an important decision for households to make as discounts are generally offered for payment by direct debit."
Mr Morgan said reputable and independent services like the Energy Advice Line could help customers find the right tariff by steering them through the options available, free of charge. All they had to do was go online or call the service, with the following information to hand:
- The name of existing supplier and tariff,
- Annual spending on energy (or use in kilowatt hours) available on a recent bill,
- Bank details if you want to switch and pay by direct debit,
"New tariffs come onto the market all the time so even regular switchers might be wise to run a regular comparison to make sure they're still on the best deal," Mr Morgan said.