Misleading Energy Comparisons

Graham_Murray

I've just completed a comparison for Gas & Electricity & it showed a saving of £200, but when you look at the unit prices, they were actually more expensive.
My fixed rate expires in August 2017 but the comparison companies then use the standard variable rate to work out the yearly cost, very misleading.
On a good note the MSE shows that I am currently on the best tariff.


Well done MSE:money:

[Deleted User]

That is the way that OFGEM (the regulator) require all price comparison sites to work out costs.

System

Hi - welcome to the forum. Blame Ofgem - not comparison sites. Ofgem requires that all comparisons are based on a 12 month forward projection. For anyone on a fixed contract with less than 12 months to run, the cost is based on:

x months left on remaining fixed tariff PLUS 12 - X on standard variable tariff = INFLATED COST

Savings are then INFLATED COST - 12 months on new fixed tariff.

If follows that you can save and pay a higher annual cost at the same time.

The solution is to use MSE Cheap Energy Club which shows the Ofgem method and a more accurate 12 months on present fixed tariff compared to 12 months on new fixed tariff comparison.

The Ofgem savings methodology is only flawed for customers on fixed tariffs with less than 12 months to run.

molerat

EnergyHelpline also allow you to select current tariff to compare savings against.

LewisHamilton

OP seems to understand the most important aspect of switching. Will my price per kWh and standing charge be cheaper than what I'm currently on. If the answer is no for both then don't even consider it.

These switching sites are misleading. The best way forward is to simply ask what is the price per kWh and the price per day for the standing charge. They need to be teaching this is in school instead of religious studies or general studies.

molerat

The only thing on the comparison sites that is misleading is the "savings" and that is mandated by OFGEM. The annual cost and the order of cheapest supplier is correct. Taking unit price and standing charge on their own just leads to confusion. Interpret the comparison sites correctly and tick the correct boxes you will get everything you need to know presented to you without having to do any complicated calculations.

teddysmum

molerat wrote: »

EnergyHelpline also allow you to select current tariff to compare savings against.

That can also mislead, at the moment where most providers' rates have hugely increased, as your current fix will be much cheaper than the best your provider will offer from now onwards.


I think the best thing to do is find your current provider's best deal on the list then compare its savings (over standard rate, of course) with others above it and decide whether you want to risk one of the small companies (who are turning out to be the cheapest) or think a change is worth just an extra £10 per annum saving, compared to staying put and re-fixing.

phillw

LewisHamilton wrote: »

OP seems to understand the most important aspect of switching. Will my price per kWh and standing charge be cheaper than what I'm currently on. If the answer is no for both then don't even consider it.

These switching sites are misleading. The best way forward is to simply ask what is the price per kWh and the price per day for the standing charge. They need to be teaching this is in school instead of religious studies or general studies.

It depends on how much energy you use. Sure you can go to the providers and get the unit price & standing charge. Then multiply the standing charge by the number of days and the unit price by the number of units you think you'll use. Then order them by which comes out lowest, but all you've done is manually calculated the same number that the "misleading switching sites" have calculated (they'll have added the VAT as well, which you can also waste your time on).

Some tariffs have a high standing charge and a low unit rate, others have the opposite. Without taking the energy usage into account you cannot possibly choose the correct tariff.