Archive: MoneySavingExpert's Money Tips Email

ENERGY - IT'S ALL SHOOK UP...
Martin: The Price Cap FALLS 12.3% on 1 April, prepay will become cheapest way to pay, standing charges will RISE... but at least big switch savings may return...

On Friday, the regulator Ofgem confirmed the new April Energy Price Cap, which will fall an average 12.3%. This dictates the price most homes in Eng, Scot & Wales pay for energy (so that's YOU, unless you're on a fixed or special tariff) as most firms just charge the max. It moves every three months, mostly based on average wholesale rates, yet there's a time-lag, eg, the Apr-Jun Cap is based on Nov-Feb rates. Here's my summary of the key need-to-knows (or watch my video explainer or read full details)...

1. Prices drop an average 12.3% so for every £100 spent now you'll pay ~£88 for the same use. It's moving in the right direction, but even from April, prices will be near double the cheapest pre-crisis. Current predictions are the Cap will drop a chunk again in July, then a small Oct rise (but that'll still be 20% less than now) - but of course that's all crystal-ball gazing. Prices vary by region and how you pay - here are the UK averages for scales of magnitude...

2. Overall, bills will fall, but (aaarrgh) standing charges are rising to £334/yr pro-rata. From April you'll pay an average  91.5p/day just to have a gas & elec facility (see why standing charges are rising). I've long campaigned against this energy 'poll tax' as it's a moral hazard, meaning lower users see relatively less gain from cutting use.

Yet as unit rates are the majority of each bill in all normal circumstances, barring mostly empty homes, you'll STILL PAY LESS OVERALL from April, but the standing charge rise means higher users, especially with gas, save a higher percentage than lower users. After much lobbying I'm glad Ofgem is reviewing the standing charge, but its report is still weeks away.

3. PREPAY will become the cheapest way to pay for the foreseeable future. Prepay (key & card meters), which many of the most vulnerable use, were always the rip-off, so this is a staggering, welcome turnaround. Prepay standing charges are being cut to equal Direct Debit, yet prepay unit rates are cheaper. From April, prepay will be an average ~3% cheaper overall.

But before you move to it, a word of caution... prepay deals tend to be few & far between, so if and when proper competition returns, the big discounts are likely to be for Direct Debit customers. So I strongly suspect Direct Debit will stay by far the overall cheapest for switchers, but for those who don't, prepay will undercut it.

4. Decent switching deals may restart from 1 April as Ofgem's changed one of the background rules that stop them. It's ending the 'Market Stabilisation Charge' launched mid-energy crisis, which means switch firm and the new provider must compensate your old one if it's undercutting it due to cheaper wholesale rates. I was fuming when it launched this and sadly lost my temper, using inappropriate language with Ofgem staff (which I apologised for) when I was told it was to "stop the harmful effects of competition" - ie, stop cheaper prices. So I am of course delighted to hear it's going, and hope it'll spur real competition to drive down prices - though Ofgem could've gone a step further.

5. You can undercut the Price Cap by 3%... The E.on Next Pledge tariff is open to switchers & existing customers who pay by Direct Debit. E.on promises it will remain roughly 3% below the Price Cap for a year (so £50/yr at typical use), so when the Cap drops, so will it. Therefore, as long as you're happy going to E.on, and have (or get) a smart meter, if you're going to stick on the Price Cap, you may as well move to this discounted tariff. It has £25 per fuel early exit penalties.

6. The cheapest fixes, if you want peace of mind. The big benefit of a fix is you know exactly what you'll pay. Yet the key is at what rate you fix. If the predictions are right (a big 'if'), over the next year you'll pay 18% less on average than you do now (or 21% if you're comparing against E.on), so you'd want to fix at around that price, not current prices, for it to look a winner.

Last week when the Price Cap fall was predicted to be a bit bigger, we thought the British Gas Price Promise of a fix at £1/fuel lower than the Apr Price Cap looked good. Then, after the announcement, it looked less good, but it's now said it'll drop it to an average £30 lower. That's roughly 14% cheaper than current prices, the same as Outfox's fix - though the latter, like Octopus Energy's 13% cheaper existing-customer deal, has the advantage of no early exit penalties. See full cheap fix analysis.

How to pay less at Amazon... 
THREE 'hidden' stores where it sells at cheaper prices

Online retail e-giant Amazon is a go-to for many as it's so easy (you could even say, not at all taxing), yet it's so vast there are areas few venture to, but which can cut costs. Our Amazon buyers' guide is full of tricks across its range, but today we've focused on its core shopping areas. Though do always check if you can buy cheaper elsewhere (PriceRunner's handy for that).

1. Amazon Warehouse: Big discounts on often new returned goods
- Speedily find the bargains: Use our free Amazon Warehouse Discount Finder.
- Best for? Up-to-date branded electricals, kitchen appliances, laptops, lawnmowers, games, jewellery, household items.
- Consumer rights: You've statutory rights, but may not get the manufacturer warranty.

Amazon Warehouse* sells returned items at knockdown prices - sometimes just as someone has changed their mind. Items are graded from 'acceptable' up to 'like new' and are usually priced far cheaper than buying new. It's a way to get current-model products that might otherwise be out of your price range. Sometimes they may be unpackaged, but you're told this.

To spot the bargains, we built the Amazon Warehouse Discount Finder. Simply tell it what you're looking for and it'll show you how much you can save compared with buying new at Amazon.

2. Amazon Renewed: Used, previous-generation tech in top condition with a one-year warranty
- Speedily find the bargains: Head to Amazon Renewed* and use the search. If it's phones you're looking for, then use our mobile refurbs finder for a wider range.
- Best for? Slightly older tech, including phones, tablets, headphones, games consoles, smartwatches and cameras.
- Consumer rights: All have a one-year warranty on top of your statutory rights.

While Warehouse is mostly for current models, Renewed sells pre-owned tech products that have been tested and refurbished and look like new, such as previous generations from Apple, Samsung and Dell.

As they're refurbs, stock is limited, but we found a 64GB iPhone 11 for £198 (£429 new), Xbox carbon black controller for £38 (£54 new) and 500GB PS4 Slim for £154 (£286 new). Patricia told us: "Bought a phone and tablet as good as new. My kids didn't notice the difference and it saved me hundreds."

3. Amazon Outlet: Odds and ends, but worth a check for 15% to 70% off new overstocked items
- Speedily find the bargains: Head to Amazon Outlet* and use the search.
- What's it best for? Brand-new out-of-season items such as leftover Christmas cards/gifts and lesser-known brands.
- Consumer rights: You've statutory rights.

The clearance Outlet has 1,000s of brand-new surplus items which Amazon (or third-party sellers) are keen to shift, though it's hit and miss. We found some Aigle kids' wellies for £6. Best way to think of it is like any store's end-of-sales clearance - it's a mix of funk, junk and a few things you may put in your trunk. Do check prices though - not everything in the Outlet is discounted, and even those that are may not be great deals. See our Amazon Outlet analysis.