If you are like most consumers, you dread getting your electricity bill each month. Regardless of your current tariff, you probably wonder if some other electricity supplier could offer you a cheaper price. In all probability, another supplier can beat the price of your current tariff, but how can you find the best deal?
The answer is to use one of the many price-comparison websites. Unfortunately, it’s not as easy as the headlines on the websites proclaim. However, by following a few simple tips, you can use a price-comparison website and rest assured that you are getting the best deal possible.
Most price-comparison websites are very similar. You enter your postal code along with some additional information about your electricity use, and the website will display the cheapest deals in its database that matches the information you entered. Most websites will also display an estimate of your annual savings on your electricity bill. In theory, you could look at the cheapest electricity supplier, and if their price was reasonably lower than your current electricity supplier, then you could switch and save money.
However, things are never as simple as they appear at first glance, and you should look at the results on the website a little closer.
Here are 6 things you should consider when conducting an electricity price comparison:
1) Payment Type
Most electricity suppliers give a discount for customers who pay by direct debit. When you are comparing the prices of any electricity suppliers found on a price-comparison website, you should make sure both prices are for the same type of payment. Otherwise, you may think one electricity supplier has a cheaper price than another supplier when that may not be the case. The first supplier may be listing the price for its direct debit discount while the other supplier is listing its standard price.
2) Estimated Savings
The estimated savings for an electricity supplier may not be your actual savings on your electricity bill. Most price-comparison websites use one of the standard electricity usage groups developed by the Office of Gas and Electricity Markets (Ofgem) when calculating your estimated savings. Consequently, if your annual electricity use is higher than the usage group used by the comparison website for its calculations, your annual savings will probably be much less than the estimated savings displayed on the screen.
Most comparison websites use Ofgem’s medium user group for calculating your estimated savings. A medium user is considered a 3 bedroom home, and it will have about 4 residents. If your home is larger or smaller than a 3 bedroom home, or if you have more or less than 4 people living in the home, then your actual electricity savings will probably be different.
A detailed explanation of Ofgem’s energy usage groups can be found on their website at ofgem.gov.uk.
3) Trustworthiness of the Website
All price-comparison websites are not created equal. Consequently, the electricity savings displayed on one comparison website may not be as accurate as the information displayed on another comparison website. That doesn’t necessarily mean the website is intentionally displaying misleading information, but some comparison websites are better managed, and therefore their information may be a little more reliable. How can you tell if a website is reliable?
One method is to ensure the price-comparison website participates in Ofgem’s Code of Practices, and that they have been given a Confidence Code by Ofgem. The Confidence Code means they meet Ofgem’s stringent requirements. Popular price-comparison websites such as uSwitch.com and Which? Switch have received Ofgem’s Confidence Code.
4) Price End Dates
Electricity suppliers are always changing their prices and improving their tariffs. Therefore, you need to pay close attention to the end dates of the various tariffs when comparing prices between electricity suppliers. While one electricity supplier may currently have the cheapest price on a price-comparison website, you might be better off switching to an electricity supplier with a slightly higher price if their price will be valid for a longer period of time.
5) Make Multiple Comparisons
Because electricity suppliers are continuously changing their prices, the cheapest electricity supplier found during a search on one day may not be the cheapest on a search done a few days later. Some electricity suppliers chase each other’s prices, and if you give them a few days, they may undercut the price of the other supplier.
6) Quality is Important
You may regret switching to the cheapest electricity supplier if they have poor customer service. Consequently, you should read as many customer reviews as possible before switching.
Most consumers would benefit from using a price-comparison website to find a cheaper electricity supplier. However, you do need to consider the information you see displayed before switching.
Guest Author: Sam Jones always recommends to people looking to do an electricity price comparison that uSwitch compares gas and electricity prices and rates and presents the information in an easy to understand format