I’m an energy expert and a common mistake could leave you paying £2,000 a year extra – how to avoid it
MILLIONS of families are facing massive heating bills as well as rising food prices and other costs - but a simple mistake could leave them paying an extra £2,000 a year, an energy expert has warned.
Richard Neudegg is the head of regulation at comparison site uSwitch.com and has more than a decade’s experience in consumer rights.
He’s just one of the experts on our expanded Squeeze Team which is here to help you save money.
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Neudegg said that customers should watch out for offers from their energy supplier to switch them onto a new tariff, which could be thousands of pounds per year more expensive than the one that they’re already on.
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“We used to say back in the day, you could switch and easily get a tariff that’s much cheaper than what you are currently paying if you haven’t changed deals in a while.
“At the moment that's not true.
“There are some very, very expensive fixed tariff deals in the market and some suppliers have been flagging those to customers.
“If you switch to them in the middle of winter, you’re going to immediately see a jump in what you're paying.
“We’ve seen some fixed tariff deals that are as much as £4,000 a year for a customer with average usage.”
Currently, if you have come to the end of a fixed or variable tariff that you took out some time ago, you will be on your supplier’s standard variable tariff.
In the past this was often more expensive than the best deals on offer from new suppliers, which was why it made sense to switch regularly.
But because of the current energy price crisis, supplier’s standard tariffs are cheaper than any of the deals offered to new customers.
That’s because the standard tariff is covered by the regulator’s energy price cap which means that for a family with average usage, their annual bill should be no more than £1,277.
If you use more than the average household, your bills can still be higher than this, but the rate that you pay for each unit of energy you use is capped.
But, from April this cap is set to jump by around £700 so that a family with average usage could end up paying up to £2,000 a year.
Neudegg warned that some suppliers are currently offering customers fixed rate tariffs either by letter or when they log into their online account.
They might try to encourage you to switch in order to have certainty over your monthly payments, but it could result in huge extra costs, he said.
“The reason is because they're making a massive loss on every customer.”
If you switch to a new fixed rate tariff you will probably have to pay an exit fee to leave, but worse than that you are unlikely to be able to get back onto a price-capped variable tariff until your deal ends.
That’s why it is such a costly mistake which could lead to you paying thousands of pounds a year over the odds.
Neudegg said: “You would be kind of stuck there really.
“All of the norms of the energy market as we know it are not operating as they were.”
If you're trying to reduce your bills, there are some easy ways to lower your energy use.
Spending a few pounds on a draught excluder could shave hundreds of pounds off your energy bill.
Warm air escaping under doors and through poorly insulated doors and windows is the biggest culprit when it comes to wasting energy.
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Take a look at the way you use appliances, for example if your washing machine defaults to a 60 degree wash, consider setting it to a lower temperature.
Finally, turning down your thermostat by just one degree is one of the simplest thing you can do to reduce your bills.
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