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Switch energy now!

Szu Ping Chan
by Lovemoney Staff Szu Ping Chan on 24 March 2009  |  Comments 1 comment

Last week, npower became the last of the 'big six' energy providers to reduce its prices. Here's what you should be looking for now...

It was a case of last but not least in the energy market last week. And, almost eight weeks after British Gas became the first provider to slash prices, rival npower finally announced it was cutting electricity prices by 7.2%.

Here's how the suppliers finally shaped up:

Supplier

Gas Cut

Electricity Cut

Prices Effective From

British Gas

10%

0%

19th February

EDF Energy

0%

8.8%

31st March

E.ON

0%

9%

31st March

npower

0%

7.2%

31st March

Scottish and Southern

4%

9%

30th March

Scottish Power

7.5%

3%

31st March

npower's announcement means that the 'big six' energy suppliers have now all cut prices. However, when you consider costs went up by an average of 42% last year, you could say these latest reductions aren't that big a deal.

In addition, only Scottish and Southern and Scottish Power cut both electricity and gas prices, with the biggest single cut standing at a rather paltry 10%.

And, as Neil Faulkner highlighted a week ago, although standard (the most expensive) tariff customers will reap the benefits of the cuts, the recent price changes have had little effect on the cheapest tariffs.

For example, while npower's cuts include pre-pay and some online tariffs, it doesn't include its cheapest offering, Sign Online 14.

Still, if you've never switched providers, or are on a standard tariff, you're likely to be paying the most expensive rates going.

So, with tariffs much easier to compare now everyone has shown their hands, if you're looking to switch, it couldn't be a better time.

Vital statistics

Using lovemoney.com's comparison tool, I looked at some of the cheapest duel fuel deals for someone living in Greater Manchester.

Here are the cheapest tariffs for a low user with an average annual electricity consumption of 1650 kWh and gas consumption of 10,000 Kwh:

Supplier and Tariff

Expected Yearly Spend

npower Sign Online 14

£425.11

Scottish Power Price Sure Energy Online

£480.45

Scottish Power Online Energy

£482.12

Here are the cheapest tariffs on offer for a medium user with an average annual electricity consumption of 3300 kWh and gas consumption of 20,500 Kwh:

Supplier and Tariff

Expected Yearly Spend

Websaver 2 Paperless

£1,043.73

EDF Energy Energy Online

£1,044.64

E.ON Energy Online Extra Saver v13

£1,056.37

...and for high users with an average annual electricity consumption of 4,950 kWh and gas consumption of 28,000 Kwh, these are the best tariffs:

Supplier and Tariff

Expected yearly Spend

EDF Energy Energy Online

£1,417.82

E.ON Energy Online Extra Saver v13

£1,434.01

npower Web 14

£1,436.38

Although your cheapest tariff will depend on where you live and how much you use, there are also some universal rules of the switching game.

Firstly, online tariffs dominate the best buy tables - regardless of where you live, and even though these bargain tariffs did not benefit from the announced reductions, they are still the cheapest on offer.

Secondly, all the best deals will require payment by monthly direct debit. That can be a problem as energy companies sometimes don't adjust the direct debits frequently enough and users can end up overpaying for several months. Or even worse, users can  find out they haven’t paid enough, and suddenly receive a big bill. On the other hand, paying by monthly direct debit is much cheaper than settling bills by quarterly cash or cheque.

One other factor starting to creep in is tie-ins. Until late 2007, energy companies weren't allowed to lock you in to lengthy contract deals, but increasing competition led to a change of heart from regulator Ofgem.

Although most of the best deals won't tie you in, there are some exceptions. For example, if you're interested in the Websaver 2 tariff from British Gas, you'll now have to commit until 31st December 2009, or face a £30 cancellation fee. So make sure you read the terms and conditions before signing up.

That said, now everyone is on a level playing field, it truly couldn't be a better time to compare the best deals. Switching is easier than you think, and could shave hundreds off your energy bills.

More: Recent energy reductions were a sham / Cheapest energy tariff is fixed for a year

Change energy providers now using our simple switching tool!

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