Now is the time to compare energy deals

by Mark Vickery on 30 January 2012  |  0 comments
Tweet

In a move which may offer some light relief to households around the UK, all of the `Big Six' energy suppliers have now announced price cuts.

However, the scale of the cuts announced may not make a significant difference to the average families expenses, with a typical dual-fuel household energy bill dropping a mere 2-3% when averaged among the six suppliers. This equates to an annual bill reduction of only £23 when averaged across the major providers.

These price reductions have been made widely available due to recent falls in the wholesale energy market. Due in part to the mild winter weather and economic downturn, energy consumption has reduced by 30% year-on-year. As a result, wholesale gas prices have fallen 31% and wholesale electricity prices have dropped 28% since their peak last summer.

The reductions, although good news, will be a drop in the ocean for hard-pressed UK consumers whose budgets have been hit hard by the 21% increase in energy prices that have been introduced in the last 18 months. There should still therefore be plenty of scope for more price drops later in the year.

Now is the best time to compare like for like and get on the best possible deal. You will find comparing energy suppliers will often result in far greater discounts than waiting around for suppliers paltry price drops to come into effect.

* against typical bill of £1,345 per year as estimated by Ofgem. All costs are for a yearly average usage dual fuel household paying by monthly direct debit. Average usage defined by Ofgem as 16,500 kWh p.a. of gas and 3,300 kWh p.a. of electricity.

Compare energy tariffs at lovemoney.com