Please help me understand

Clairabella · 13 September 2017 at 8:58AM

Cheap energy club tells me that I will save £10 by switching.

Current supplier electricity: 19.42 per day 12.038 per kWh

gas: 19.950 per day 2.756 per kWh

Ovo electricity 28.7 per day 11.86 per kWh
gas 28.77 per day 2.67 per kWh

I can see that the unit costs are slightly lower but, the daily standing charge is almost 20p per day more. Given that I am a low user, how can this possibly save money?
Please can someone explain this, I'm feeling very stupid that I can't get my head around it!:o

molerat · 13 September 2017 at 9:06AM

One of 2 things here.

It genuinely does work out, you need to do the sums

or

You have set the CEC to give you the OFGEM mandated "savings" method based on your next year's use - if you are on a fix it uses the price including the remainder of the year on their (expensive) standard variable tariff. It can show a saving even if the cost is higher.

The_Big_Bamboo · 13 September 2017 at 9:40AM

Try uswitch.com to compare your figures. It’s much better than the MSE site when comparing the entire market and it’s easier to manipulate, IMHO.

However, uswitch.com doesn’t have the personal touches and it doesn’t give the advice tit-bits that you find on MSE.

System · 13 September 2017 at 10:04AM

As others have suggested, comparison sites give you information on the annual total cost based on the projected annual projected consumption that you have used in the comparator. Add or subtract 1000kWhs/year, and the cheapest offer on the market may well change. It is therefore vital that you work out, as accurately as you can, how much energy you think that you will use for the coming 12 months in kWhs per year not £s.

As a general rule, high standing charge/low unit price tariffs suit high users; conversely, low standing charge/high kWh tariffs suit low users. If we have a very cold Winter, then this will hit my gas projection the hardest. I therefore run a number of comparisons to see how the deal might change if I use 10/15% more gas than I had anticipated. Even then, the choice and of supplier and tariff are still a bit of a gamble.

Clairabella · 13 September 2017 at 12:37PM

Thanks everyone for your advice.

As we've only recently moved from a five bedroom house to a small bungalow, we don't have consumption figures only an estimate. I will try the other comparison site though.

I've done the comparison on uswitch and am getting similar results. Given that Ovo is a two year fix, albeit with exit fees and only a £24 pa saving, I think I should probably change.

molerat · 13 September 2017 at 1:11PM

The problem I have with USwitch is that they only use the OFGEM mandated savings and they do not have my current tariff listed.

BROKEN · 13 September 2017 at 1:43PM

Try looking into the Iresa Limited for your gas and electric, take your meter readings from the first one and the latest reading and take one from the other this will tell you how much G&E you have used in the last 12 months, Look at their Fixed for 12 months tariff and you will probably save. Ive gone from £960 to £680 for this year coming year . hope this helps

Raxiel · 13 September 2017 at 1:43PM

Clairabella wrote: »

Cheap energy club tells me that I will save £10 by switching.

Current supplier electricity: 19.42 per day 12.038 per kWh

gas: 19.950 per day 2.756 per kWh

Ovo electricity 28.7 per day 11.86 per kWh
gas 28.77 per day 2.67 per kWh

I can see that the unit costs are slightly lower but, the daily standing charge is almost 20p per day more. Given that I am a low user, how can this possibly save money?
Please can someone explain this, I'm feeling very stupid that I can't get my head around it!:o

As Molerat points out, sometimes when you actually do the sums a trading daily charge for unit rate can actually work out cheaper I ran the numbers you gave through my spreadsheet expecting to demonstrate that but it turns out you'd have to be using over 5600kWh of electricity and 38000kWh of gas :eek: a year for OVO to be cheaper (At a cost in excess of £1860 a year), so not this time!

As others have suggested, the saving is assuming you go onto a higher tariff for the rest of the year once your current deal ends. Try following Molerat's other suggestion of setting the cheap energy club to use your current price for the next 12 months for a more accurate idea of how much more it will cost you each month. I've no idea how you actually do that thought, I've had a look and can't find the option. Perhaps someone else could chip in?

BROKEN · 13 September 2017 at 1:49PM

OOps forgot to mention
4.11 Any credit on your account on the 1st day of a month in the contract term will accrue interest throughout that month at the rate set out in your contract letter, and will be shown as a credit on your account in your next bill.

4.12 We may change the interest calculation or withdraw interest credits entirely at any time but we cannot retrospectively increase the amount of interest credit you receive, for example if you ask us to issue a new bill pursuant to an updated meter reading.

4.13 The maximum amount of interest credit you can receive on your account is capped at 20 times the amount of your current Direct Debit amount.

4.14 Our interest credits are linked to your energy usage and so you promise that you will not make payments into your account just to receive interest credits. If we think you are making payments into your account just to receive interest credits, we will refund the extra amounts to you and may withhold the interest credits on those amounts.

BUT its only on the direct debit amount to pay your G&E bill which to me seems unreal that an energy supplier would do this

The_Big_Bamboo · 13 September 2017 at 2:19PM

Raxiel wrote: »

As Molerat points out, sometimes when you actually do the sums a trading daily charge for unit rate can actually work out cheaper I ran the numbers you gave through my spreadsheet expecting to demonstrate that but it turns out you'd have to be using over 5600kWh of electricity and 38000kWh of gas :eek: a year for OVO to be cheaper (At a cost in excess of £1860 a year), so not this time!

As others have suggested, the saving is assuming you go onto a higher tariff for the rest of the year once your current deal ends. Try following Molerat's other suggestion of setting the cheap energy club to use your current price for the next 12 months for a more accurate idea of how much more it will cost you each month. I've no idea how you actually do that thought, I've had a look and can't find the option. Perhaps someone else could chip in?

uswitch.com will show your price comparison based on your ‘present plan’ or your price comparison based on your ‘projected plan’;…(assuming uswitch has your present tariff listed of course!)

Each Energy plan listed has a ‘What Will I Pay?’ option; …clicking this option then allows you to choose “Compare cost to my current projection”…or…”Compare cost to my current plan”.

It’s a very comprehensive and easy to use/understand feature.

If using uswitch.com ensure you click on the ‘Include plans that require switching directly through the supplier” button,….otherwise uswitch.com will only display their ‘favoured’ sites,…. not the whole market.

Raxiel · 13 September 2017 at 2:29PM

BROKEN wrote: »

OOps forgot to mention
4.11 Any credit on your account on the 1st day of a month in the contract term will accrue interest throughout that month at the rate set out in your contract letter, and will be shown as a credit on your account in your next bill.

4.12 We may change the interest calculation or withdraw interest credits entirely at any time but we cannot retrospectively increase the amount of interest credit you receive, for example if you ask us to issue a new bill pursuant to an updated meter reading.

4.13 The maximum amount of interest credit you can receive on your account is capped at 20 times the amount of your current Direct Debit amount.

4.14 Our interest credits are linked to your energy usage and so you promise that you will not make payments into your account just to receive interest credits. If we think you are making payments into your account just to receive interest credits, we will refund the extra amounts to you and may withhold the interest credits on those amounts.

BUT its only on the direct debit amount to pay your G&E bill which to me seems unreal that an energy supplier would do this

It does seem generous, I suppose its one way to stop customers worrying about building up a summer surplus, you're not losing out by having it in your energy account rather than the bank (and no doubt helps with their cashflow too)
One thing about Iresa, they only seem to process charges against usage for gas every other month, which means the gas portion of the monthly direct debit gets the full 4% interest on the months they collect it but don't update the balance.

Please help me understand

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