Don't believe "Switch now and save" emails

RiskyScientist

Comparison websites send you emails about how you can switch now and save hundreds of pounds. If you are not currently on the "rip-off" standard variable rate, this claim of mkaing big savings is extremely deceptive!

I usually lock in a year at a time using a fixed rate (for like £30 you can break the contract if energy prices drop a lot), and I just got something in the email saying I can save £961 per annum by switching now!! I looked up my actual tariff and compared it with the new tariff: they are about the same. Huh? How am I supposed to save nearly a grand on a deal that is about the same rate as the one I have now?

The answer is that the comparison is done with the nice fixed rate I have versus the "assumed" standard variable rate that my supplier would charge me if I were silly enough to not shop around and switch to the cheapest rate as my current deal is about to end.

On this particular website, if you follow some unobvious links, you can get to a "fair" comparison that shows how much you can save compared to your current deal: the answer was zero!

It is common sense I guess, but the moral of the story is that comparison websites want to get you excited so you will go to their site and potentially switch, giving them business.

editor1

RiskyScientist,

Its a fact that Comparison Sites can be misleading, particularly in the claims made on massive savings.

As a rule of thumb, it pays to know your actual usage over a two-three year timeline, the rates you are paying and cheapest rates on offer from your current supplier - also need to know standing charges for both gas and electricity and then go compare with a calculator in hand. Also beware Fuel Charge of 5%.

Now, by way of example, I've used multiple comparison sites, including MSE's one to check costs of a new 'fixed' deal for my parents - each site comes up with different cost savings, but the same actual monthly payments - so, definitely confusing.

However, you can check with your own supplier what deals they are offering, and then check other deals via competitor websites, but undertaking this course, I've noted that First Utility offer a 20 month fix I can sign up for for £105 per month, which is £12 more a month than my present fixed price. By contract, and via both their website 7 all comparison sites, OutFox the Market offer a 18 month fix for £83 per month based on my families actual yearly usage - indeed, I've rounded up a little to be on the safe side.

So, If I switch, my annual saving is £264. Indeed, if I change to OFTM I'm paying cheaper annual prices than I was with OVO, whom I left for First Utility in January 2017, which means my folks energy cost is lower than it was in February 2016 - we did have cash back of £160 from FU, which mean't in reality we paid maybe £65-100 more over the length of the 15 month fix.

By changing now, I can repeat this process in August 2019, which means beating the annual gas & electric price rises that usually occur in September/October.

What a game! however, every penny counts nowadays unless of course you are loaded.

System

RiskyScientist wrote: »

Comparison websites send you emails about how you can switch now and save hundreds of pounds. If you are not currently on the "rip-off" standard variable rate, this claim of mkaing big savings is extremely deceptive!

I usually lock in a year at a time using a fixed rate (for like £30 you can break the contract if energy prices drop a lot), and I just got something in the email saying I can save £961 per annum by switching now!! I looked up my actual tariff and compared it with the new tariff: they are about the same. Huh? How am I supposed to save nearly a grand on a deal that is about the same rate as the one I have now?

The answer is that the comparison is done with the nice fixed rate I have versus the "assumed" standard variable rate that my supplier would charge me if I were silly enough to not shop around and switch to the cheapest rate as my current deal is about to end.

On this particular website, if you follow some unobvious links, you can get to a "fair" comparison that shows how much you can save compared to your current deal: the answer was zero!

It is common sense I guess, but the moral of the story is that comparison websites want to get you excited so you will go to their site and potentially switch, giving them business.

Suppliers and PCWs are just complying with the !!!8216;guidance!!!8217; given to them by Ofgem. Savings figures are only inflated for consumers on fixed rate tariffs with LESS than 12 months to run. In fairness to Ofgem, some form of assumption has to be made as to what a consumer will do at the end of a fixed term tariff and a default to the supplier!!!8217;s SVT is at least a known do nothing position. This methodology is currently out for review/consultation.

MSE Cheap Energy Club also shows a simple !!!8216;pay this for 12 months NOW!!!8217; compared to !!!8216;pay this for the next 12 months on these tariffs!!!8217;.