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So, why’s everyone talking about switching energy supplier?
Let’s roll things back to September. That’s when supplier PFP Energy went bust; then another eight companies followed. Suddenly 1.7 million people in the UK found themselves without a power supplier. Now the remaining companies – like British Gas and EDF – are planning to hike prices.
Why is this all happening now?
Gas prices have been driven up by supply-and-demand issues. Europe and Asia experienced cold winters last year, which used up reserves. Meanwhile, there has also been increased demand for energy. The result? Prices have risen by 250 percent since last January.
How’s that impacting the UK?
A lot of the companies that went bust were smaller firms that offered some of the better deals out there. Price increases meant they were unable to stick to the tariffs they had advertised, and so they were forced to cease trading. To help remaining suppliers cope, Ofgem, the energy regulator, increased the energy price cap from £1,138 to £1,277 in October, its highest level ever. That’s the most suppliers can charge customers on a standard variable tariff (SVT). It will probably rise again in April, though.
Can I avoid paying more by switching suppliers?
There are two types of energy deals. Fixed deals where you pay the same monthly fee for a period of time and SVTs, the tariff you’re automatically placed on unless you request a different one or have a top-up meter. In the past, moving from an SVT to a fixed deal was a good way to get cheaper energy. Not now. Tashema Jackson from energyhelpline.com says that if you’re on an SVT, it’s best to stay put. Prices could come down in the future, and if you’re stuck with a fixed tariff, you could pay a lot more in the longer term as they are more expensive than usual now.
What if my deal is ending?
Jackson says better deals are currently few and far between as suppliers up their lower tariffs or pull their deals from the market altogether. ‘It might be best to give your supplier a call and see what they can do,’ she advises.
Should I be worried?
‘You may want to panic,’ Jackson says, ‘but your energy supply won’t be cut off. Even if your supplier goes bust, Ofgem will move you to another one. The lights won’t go out.’ If you’re struggling to pay your bills, your supplier should be your first port of call and organisations like Citizens Advice might be able to help.