The latest data from Ofgem shows that over 33 per cent of households are paying too much money for their monthly energy bills as they are on the wrong tariff. Millions of customers are on a plan called a SVT (standard variable tariff) which causes them to pay a different amount each month on their fuel bills, and the price paid is often not the lowest.
While the cost of a SVT may be higher than other fixed plans, on average a customer is paying about £5 more per month then they should. Granted this is not a lot of money, but it adds up to £55 to £60 per year. That could be money that could otherwise be used to pay for housing, food, or even a holiday! So that extra £5 per month from a SVT is just being wasted.
How many people are overpaying
While the exact number is hard to determine, Ofgem estimates that around 14 million people are on a standard variable tariff (SVT) as of 2017. This is about 33 to 37% of the population in the UK. That means that many people are overpaying around £55 too much on their energy bills. That is a total of £700 million per year going to the big six energy suppliers. That extra £700 million could instead be going to families all across the UK, and it can help make a difference in many monthly budgets.
Solutions for the 33% of customers
The first thing to do is too look into switching to a new energy provider. There are after all six to choose from, including EDF, British Gas, Scottish Power, SSE, Npower and E.on. there are also several smaller independent regional energy providers that also have their own tariff plans.
Do some research. Compare prices. Always look into a fixed rate deal, as that will lock in the customer’s monthly cost for the entire year. The cost of any fuel bills bill be much lower on a fixed rate deal vs. a SVT. The savings will add up quickly, and that money can then be applied to paying other monthly bills that the customer may have.
Once you have found the plan with the lowest fixed tariffs, switch. Hundreds of thousands of families do this per year, with the number at about 300,000 as of June 2017. However as the data shows millions of more people are eligible to switch to a fixed plan but do not do it for some reason.
There are places to go to for free advice on the process. A citizens advice bureau (CAB) is one place for free information and help in applying for a fixed tariff, as there are many energy supplier terms. Or call one of the many different energy suppliers out there and ask them directly for advice on their plans that are effective as of 2017. Document the costs for your home, and compare multiple providers.
Once this work has been done, then make the change to a fixed tariff plan. There are no fees involved in doing this. Get off of the standard variable tariff (SVT) as those are more expensive. Be one of the many people that saves as much as £60 per year on energy bills!