Seven myths that stop you getting a better energy deal
According to research carried out by weflip, 81% of a sample of 2,000 UK adults said they would like to cut their energy bills in 2019. However, it found that only 20% actually end up lowering their bills.
From the research findings, weflip has identified seven myths and misunderstandings which stop individuals from shopping around for a better energy deal:
1) Loyalty pays
Energy companies typically use their cheapest rates to attract new customers while millions of loyal customers are stuck on costly standard variable tariffs (SVTs). From 1 January 2019, the maximum rate energy providers will be able to charge SVT customers will be capped at £1,137 per year for a medium domestic dual-fuel customer paying by direct debit.
However, to get the best deals, weflip says customers must regularly shop around. Ofgem’s own figures show that you can save as much as £285 by switching. This means the cap – with its projected average saving of £76 – could be costing these households over £200 a year.
2) Switching is too difficult and time consuming
Some people presume that changing energy supplier is complicated. However, weflip says this is far from the truth. In fact, energy is now the easiest financial product to switch, with 83% of customers who switched in the last 12 months saying they found the process easy. The switching process usually takes around three weeks and most of the work is done by the suppliers.
3) My energy supply will be interrupted during a switch between suppliers
Close to 5% of those surveyed mistakenly believe that their energy supply could be cut off during the process of switching suppliers. Household gas and electricity comes straight from the national grid regardless so, switching is, effectively, just a matter of processing the paperwork.
4) A smart meter will automatically save me money on my energy bills
Around 11% of those surveyed thought having a smart meter installed would automatically reduce their energy bills. While smart meters help customers track their energy usage and understand where they might be able to make cut backs – they only save customers money if the household then acts on its findings and reduces energy consumption.
5) I can’t switch provider because I have a prepayment meter
Almost one in 10 people surveyed mistakenly thought they were unable to switch energy provider if they used a pre-payment meter, which lets customers pay upfront for their energy.
While pre-payment tariffs are typically more expensive than other tariffs, pre-payment meter users are still able to switch energy supplier. In order to access the most competitive energy tariffs, they will need to change the pre-payment meter to a credit meter.
6) I can’t switch provider because I’m on an Economy 7 (or Economy 10) meter
A small proportion (2%) of those surveyed mistakenly thought they were unable to switch because they were on an Economy 7 or Economy 10 tariff. Meanwhile, 17% thought these tariffs provided cheaper gas and electricity prices.
Economy 7 and Economy 10 meters track daytime and night-time usage separately, with the latter typically offered at a cheaper rate than the day rate. However, the day rate is often more expensive than a normal tariff. This means that unless you use a significant proportion of your energy during the cheaper off-peak times, it can work out more expensive overall.
It is possible to switch to or from Economy 7 or Economy 10, but this may require a new meter to be installed. Weflip also points out that customers are able to switch between different provider’s economy tariffs, which can save money.
7) I live in rented accommodation so can’t switch energy suppliers
One in 10 people wrongly assume they can’t switch energy provider if they live in a rental property. Tenants who pay their energy supplier directly can usually switch suppliers. The exception is if the landlord pays the supplier for the energy used by the tenant.
The tenancy agreement will show who pays the bills and may show whether the landlord has a preferred supplier. The tenant may have to return the account to the original supplier at the end of their tenancy.