The advice of consumer groups and the goverment is to compare gas and electricity prices so you can get the best deal. Now because there has been a small reductions in energy bills the fear is that most people won’t bother to compare gas and electricity prices. But now more than ever consumers should be checking those power prices.

How to cut your energy bills and make the most of recent gas and electricity reductions

By Lauren Thompson

Last updated at 9:51 AM on 18th January 2012

Recent gas and electricity cuts have saved households only £34 a year on average. Lauren Thompson explains how to make sure you’re on the best deal… 

What’s going on with energy bills?

All of the ‘big six’ companies have announced small price reductions in the past week, taking the average total annual energy bill from £1,293 to £1,259 — a £34 cut, according to comparison site uSwitch.

British Gas has reduced electricity by 5 per cent with immediate effect. This will mean 5.3million people will save £24 a year on average.

EDF will reduce gas prices by 5 per cent from February  7, allowing 1.4million people to save £36 a year. Scottish & Southern Energy will cut gas prices by 3.8 per cent from March 26. It means 3.5million customers will save £28 a year.

Npower is cutting gas prices by 5 per cent from February 1, so 1.9million gas customers will save an average of £38. For the next two months, it is also waiving the £20 exit fees it charges 140,000 customers on fixed tariffs.

E.ON is cutting electricity prices by 6 per cent from February 27. This means 3.7million people will see an average reduction of £33 and exit fees will also be waived.

Scottish Power will reduce gas prices by 5 per cent, also from February 27, knocking an average £36 off 1.4million people’s bills.

Bills increased by an average of £224 last year, so the recent cuts have only wiped out 15 per cent of this.

Why has this happened?

Wholesale gas and electricity prices have fallen over the past year. British Gas says the ‘longer term trend’ of gas prices will be for them to rise.

But Adam Scorer, of Consumer Focus, says: ‘Companies will respond differently depending on where they think wholesale prices are heading.’

Should I switch to a new deal?

Now that all of the big six suppliers have changed prices, it is a good time to switch because there is a level playing field.

If you are on a fixed tariff, it will depend on when you signed up as to whether you can now save money. You should also calculate if the exit penalties — typically £20 for gas and £20 for electricity — are more than the savings you could make by switching, although Npower and E.ON are waiving these fees.

For example, those on British Gas’s dual fuel deal that expires in June 2012 are currently paying over the odds at £1,217, but those whose deals expire in October 2012 are paying only £1,045 — which is hard to beat, according to comparison site Moneysupermarket.

The average standard tariff is now £1,251. But you can save money by switching to an online deal — where you input your meter readings and receive your bills via email. The cheapest online deal is First Utility’s iSave v9 at £1,030, or Scottish Power’s Online Energy Saver 17 at £1,085. If you want a fixed tariff, the cheapest is Ovo’s New Energy Fixed at £1,059.

How do I switch?

If you have access to the internet, you can use a comparison website such as Moneysupermarket, uSwitch or Confused. You can also use This is Money’s energy bill finder to switch.

To get the most accurate comparison, you will need your annual usage in kWh (this should be on the back of your bill or on your annual statement) and the exact name of the tariff you are on.

If you don’t have the internet, comparison website uSwitch’s free service ‘Send us your bill’ allows people to send them a copy of their latest energy bill and an adviser will call you back. Send your bill and phone number to FREEPOST USWITCH.

Copies of bills will not be returned afterwards, but will be destroyed. Alternatively, you can call uSwitch on 0800 093 06 07.

Is there anything else I can do?

you should submit a meter reading the day before your price fall comes into effect, to ensure as many days as possible are billed at the lower price. Keep our table to remember when to do it.

Read more: http://www.thisismoney.co.uk/money/bills/article-2087987/How-cut-energy-bills-make-recent-gas-electricity-reductions.html#ixzz1l7x2od1q

If you haven’t done so yet you need to compare gas and electricity prices so you can switch to save money.

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