Advice on Energy switch

jrsga

Hello,

My 1 yr fixed energy supply is due to end 31 July with no exit fee.

I used MSEs' energy comparison site and can see that when my deal ends it will jump up.

What is the best time to swap supplier? Or how long does it take? I am trying to ensure that it ties in with the end of July?

thanks

Neil_Jones

You can switch now, you are in the 49 day switching window which for July 31st started on the 12th of June. Exit fees no longer apply.

Average time to switch suppliers is officially up to six weeks but most will do it quicker - sometimes as quick as 17 days as you have 14 day cooling off period first. Some supplies will let you specify a date.

jrsga

thanks for replying.

Presuambly its just a case of switching to the cheapest? Its saying it will save £292 a year for another one year fixed deal with another supplier.

System

jrsga wrote: »

thanks for replying.

Presuambly its just a case of switching to the cheapest? Its saying it will save £292 a year for another one year fixed deal with another supplier.

Ignore the savings as they are based on an inflated cost as follows:

Cost of next 12 months = 1 month on present tariff plus 11 months on standard variable tariff - 12 months on new fixed tariff = £292

WRONG: Check what you are paying now for 12 months and check what you will pay for 12 months on a NEW fixed tariff. As energy prices have risen considerably in the past 12 months, you will find that you are paying more per year and saving money at the same time!!

Blame Ofgem.

jrsga

Hengus wrote: »

Ignore the savings as they are based on an inflated cost as follows:

Cost of next 12 months = 1 month on present tariff plus 11 months on standard variable tariff - 12 months on new fixed tariff = £292

WRONG: Check what you are paying now for 12 months and check what you will pay for 12 months on a NEW fixed tariff. As energy prices have risen considerably in the past 12 months, you will find that you are paying more per year and saving money at the same time!!

Blame Ofgem.

I'm not sure I follow.

Surely 1 month left will mean overall for the year it would be less anyhow?

If i get actual usage for both elec and gas and then put that in Martin's website would that be more accurate?

System

jrsga wrote: »

I'm not sure I follow.

Surely 1 month left will mean overall for the year it would be less anyhow?

If i get actual usage for both elec and gas and then put that in Martin's website would that be more accurate?

Yes, you should always base all comparisons on kwhs/year for both gas and electricity. MSE Cheap Energy Club shows both the Ofgem method of calculating savings and the more accurate 'this is what you pay now for 12 months' compared to 'this is what you will pay on this particular tariff for the next 12 months if you switch today'.

The Ofgem method requires you to take a rolling 12 month view. Therefore, the estimate of your future costs is based on time left in contract PLUS 12 months minus time left on the standard variable tariff. This calculation leads to an artificially inflated annual cost. This is why an Ofgem comparison can show a saving when in fact you end up paying more.

The Ofgem method is ONLY flawed for consumers who compare tariffs when they are on a fixed tariff with less than 12 months to run. In fairness to Ofgem, an assumption of some sorts has to be made and with 70% of consumers on standard variable tariffs, their methodology promotes greater switching.

Have a read of Page 7 if you want to know more:

https://assets.publishing.service.gov.uk/media/54da24ebed915d514400000b/The_Energy_Shop_Submission.pdf

jrsga

Hengus wrote: »

Yes, you should always base all comparisons on kwhs/year for both gas and electricity. MSE Cheap Energy Club shows both the Ofgem method of calculating savings and the more accurate 'this is what you pay now for 12 months' compared to 'this is what you will pay on this particular tariff for the next 12 months if you switch today'.

The Ofgem method requires you to take a rolling 12 month view. Therefore, the estimate of your future costs is based on time left in contract PLUS 12 months minus time left on the standard variable tariff. This calculation leads to an artificially inflated annual cost. This is why an Ofgem comparison can show a saving when in fact you end up paying more.

The Ofgem method is ONLY flawed for consumers who compare tariffs when they are on a fixed tariff with less than 12 months to run. In fairness to Ofgem, an assumption of some sorts has to be made and with 70% of consumers on standard variable tariffs, their methodology promotes greater switching.

Have a read of Page 7 if you want to know more:

https://assets.publishing.service.gov.uk/media/54da24ebed915d514400000b/The_Energy_Shop_Submission.pdf

thanks.

So I re ran the numbers and we have a big saving again of around £300 for a 1YF. But its a co. name I have never heard of.

So:
Should one be concerned with that?
Ultimately presumably the supply cannot fail or the like?
Am I missing something?

Of course my current supplier has dangled a carrot to fix for another year on there "new" tariff but that is nowhere as big a saving as the above.

System

I struggle to understand how you can be making a saving when electricity prices have risen by c.30% over the past year. Where are you getting your kWh/year figures from? I usually use 2 bills a year apart but it it is important that you use actual meter readings.

All energy supply is guaranteed in the event of supplier insolvency. Your credit balance is also protected by Ofgem. The two things that you risk by switching is inaccurate billing and poor customer service if you have an issue. I have just switched from a supplier that set a new level for poor customer service to another small supplier that does at least communicate. There are no guarantees that if you switch to a Big 6 supplier that you won't have problems. That said, most consumers have a trouble-free relationship with their supplier.

jrsga

Hengus wrote: »

I struggle to understand how you can be making a saving when electricity prices have risen by c.30% over the past year. Where are you getting your kWh/year figures from? I usually use 2 bills a year apart but it it is important that you use actual meter readings.

All energy supply is guaranteed in the event of supplier insolvency. Your credit balance is also protected by Ofgem. The two things that you risk by switching is inaccurate billing and poor customer service if you have an issue. I have just switched from a supplier that set a new level for poor customer service to another small supplier that does at least communicate. There are no guarantees that if you switch to a Big 6 supplier that you won't have problems. That said, most consumers have a trouble-free relationship with their supplier.

I received my last 12 months actual figures yesterday (both elec/gas) from my current supplier and updated them on the website.

I then did the comparison on the "what i will be charged when i switch to their svr at the end of my current fixed tariff"

And the best saving was just under £300 for another 1YF - am I missing something?

thanks

System

Yes, you are not comparing like with like. As you have no intention of moving on to their standard variable rate it is irrelevant. What you are interested in is 'how much will I pay for the next 12 months of supply'?

Put simply, compare 12 months on your present tariff to 12 months on a new fixed tariff. It is 100% certain that you will pay MORE. This how MSE Cheap Energy Club shows the best deal for you.

For example, if I switched my gas and electricity to a new dual fuel deal today it would cost me £78 more for the next 12 months than if I had remained on my present tariffs (if that was possible). It is true that a switch to a new fixed deal would be a lot cheaper than a move to the standard variable tariff.

The problem with the Ofgem savings methodology is that it does allow claims of 'I switched to a fixed deal last year and saved £300 AND I am going to switch to another fixed deal again this year and save another £250'. The truth of the matter is that the new fixed deal is going to cost £50 more than last year's fixed deal.

jrsga

Hengus wrote: »

Yes, you are not comparing like with like. As you have no intention of moving on to their standard variable rate it is irrelevant. What you are interested in is 'how much will I pay for the next 12 months of supply'?

Put simply, compare 12 months on your present tariff to 12 months on a new fixed tariff. It is 100% certain that you will pay MORE. This how MSE Cheap Energy Club shows the best deal for you.

For example, if I switched my gas and electricity to a new dual fuel deal today it would cost me £78 more for the next 12 months than if I had remained on my present tariffs (if that was possible). It is true that a switch to a new fixed deal would be a lot cheaper than a move to the standard variable tariff.

The problem with the Ofgem savings methodology is that it does allow claims of 'I switched to a fixed deal last year and saved £300 AND I am going to switch to another fixed deal again this year and save another £250'. The truth of the matter is that the new fixed deal is going to cost £50 more than last year's fixed deal.

Thanks again.

Agreed I will nto be going to there SVR.

The "new" 1YF deal offered with my current supplier is around £250 more (based on the previous 12 actual usage that they provided) than what I have paid in the previous 12 months to now.

So then with the CEC if I select the "all savings are based on this cost" option i.e. my current fixed deal it indeeds goes into negative on the results.

So again I am confused, am I just picking the supposed cheapest one (from another provider) and then contacting them to give me a 12 mth projection?

thanks