Don't get ripped off by energy firms

With price rises flooding in this week, here are six ways to pay less for gas and electricity.

Having moved home in early April, and following a visit from a meter reader last week, I've just had my first quarterly bills for gas and electricity.

Compared to what I was expecting, these bills were fairly modest, totalling under £210. Then again, this period included the hottest April on record and some summer sunshine, so I'm braced for much, much higher winter bills.

The calm before the storm

Summer seems to be the most popular time for energy suppliers to announce price rises. Of course, energy consumption drops dramatically during April to September, only to rise steeply in the winter months. Energy suppliers use this seasonality to their advantage, often saving their steepest price increases for the summer months, when no-one's thinking about the cold months ahead.

I call this trick 'the calm before the storm' and it's happening on a grand scale this year.

Big price increases

The bad news is that three of the UK's 'Big Six' energy suppliers are raising their prices in August or September. Of course, it's only a matter of time before EDF, E.ON and nPower follow these three suppliers by raising their tariffs:

As you can see, these price increases range from 10% for electricity at ScottishPower to a whopping 19% for gas at ScottishPower. However, independent price-comparison service Energyhelpline -- lovemoney.com's energy partner -- has discovered that some households on dual-fuel tariffs face rises of up to a quarter (25%).

Overall, these increases could add perhaps £200 to a typical household's yearly bill for gas and electricity. Only customers on fixed-rate tariffs will avoid these steep increases in energy costs.

By the way, this cartel of six companies supplies roughly 99% of domestic energy, so you are almost certain to be hit by the coming price hikes...

Six energy-saving suggestions

With the latest round of price rises starting to bite from Monday, energy suppliers are once again putting the squeeze on their customers. This will hit our disposable incomes, making things even worse in this new 'age of austerity'.

Hence, what can you do to fight back against expensive electricity and costly gas? Here are six ideas from Mark Todd, managing director of Energyhelpline:

1. Switch when you move in

When you move into a new home, your energy supplier will usually place you on its standard or default tariff. It doesn't matter which tariff the previous occupant paid. Alas, standard tariffs are among the most expensive, so you get ripped off from the day you move in.

Therefore, as soon as you have a spare 10 minutes after moving house, get online and find cheaper gas and electricity tariffs. A switch generally takes between four and six weeks to take effect, so the sooner you do this, the more you'll save.

2. Don't ignore fixed-rate tariffs

According to Energyhelpline, there's a lot of value on offer currently from fixed-rate energy tariffs. For example, EDF's cheapest dual-fuel fixed tariff costs an average of £1,009 a year, which may save bigger households upwards of £200 a year. What's more, you can opt for fixed terms of three to four years, saving you even more if prices continue to rise as they are at present.

3. Grab these easy discounts

One easy saving is to set up a fixed monthly direct debit. Paying by this method will reduce your bill by between 5% and 10%, which could save you as much as £140 a year.

In addition, having a dual-fuel contract (getting your gas and electricity from the same supplier) could knock another 5% off your bill. Dual-fuel tariffs are often cheaper, though that's not always the case, so it's important to compare tariffs from dual-fuel and separate suppliers before you sign up.

To maximise your savings, switch to your supplier's online tariff, which replaces paper bills with emails. This can be up to £300 cheaper than standard tariffs.

4. Insulate your home

According to the Energy Saving Trust (EST), around half of heat loss in a typical home is through the walls and loft. However, low-income households can get government grants and offers towards the cost of installing certain energy-saving home improvements.

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5. Reduce your everyday consumption

By lowering your day-to-day energy usage, you can save money and, by being greener, save the planet at the same time.

Being environmentally aware isn't rocket science -- it simply involves being sensible with heating, lighting and other energy use. I'm no tree-hugger, but I don't leave electrical appliances on standby, which wastes around £30 a year in a typical household. Indeed, unless something's in use chez D'Arcy, I switch it off at the wall.

Similarly, I switch off lights in empty rooms and don't leave TVs, DVD players and games consoles whirring away with no audience. 

6. Keep an eye on your bills

To keep on top of your bills, you need to keep an eye on them. Take meter readings every time and submit them online, by email or phone. Avoid estimated bills which are often over-estimates, as well as under-estimates that could leave you with a large, unexpected bill.

Furthermore, keep an eye on your quarterly bills and direct debits. If you build up too much credit with your energy suppliers, then demand a refund and demand that your direct debit be reduced. Otherwise, you've effectively given them an interest-free loan.

Switch and save

In summary, don't wait for your energy bills to go through the roof later this year. For fast, free and friendly advice on finding the best gas and electricity deals, use our energy service or call freephone 0800 634 5191. You can switch suppliers online or over the phone -- it's that easy!

More: Find cheaper gas and electricity | The big energy rip-off | Big energy hikes: now's the time to switch