Archive: MoneySavingExpert's Money Tips Email

BillBuster #1
Cut your energy bills for 16mths
New. Exclusive cheaper than the cheapest fix. Many can pay £100s less on elec & gas
Max 10,000 switches available

It's time to slay some pelicans (big bills). This is my annual BillBuster email, focusing on cutting the cost of mobile, broadband, water and car insurance, plus I'm doing the same in my ITV1 Money Show, which is back tonight (Tue) at 8pm. Let's start with the biggest, energy bills. For those in Eng, Scot & Wales...

The Price Cap isn't a total cap on what you pay, it's a limit on the daily charge & unit cost of energy, so use more, pay more. Most firms charge at the limit, and these limits are high now, meaning the Price Cap is a pants cap, as most can easily compare & switch to a cheaper deal.

Unsure if you're on a Price Capped tariff? You likely are, as eight in 10 homes are, everyone other than those already fixed or who've actively chosen a special deal. To help, when you compare via our tool, it'll say 'Price Capped' if your current tariff is. See full how the Price Cap works help.

Move to the cheapest fix and within five working days you'll be paying typically 7% less than what those on Price Capped tariffs pay. Plus, the rate is locked in so you get peace of mind that it won't change, whereas the Price Cap's predicted to rise further. 

• New. Exclusive cheaper & longer than the cheapest fix deal (with MSE enhanced service). 10,000 available. We've blagged an E.on Next deal via our Cheap Energy Club comparison, undercutting every other cheap fix, and it protects the rate for 16mths rather than 12. As with all tariffs, the price varies with use & region (your exact rates are in the comparison), but it's on average 7% cheaper than the current Price Cap, so it's currently a £120/yr saving for someone on 'typical use' (more if you use more). If the Price Cap rises as currently predicted, the real saving would be even bigger.
  
  It's only available via us and direct at E.on Next. Yet our Energy Club is the cheaper route as new & existing E.on Next customers get an extra £10 bill credit and £20 MSE cashback. Plus, E.on's agreed to 'MSE enhanced service', ie, if there's an issue, go to it first, but if it doesn't sort it, come to us and we can and will escalate it. So how does it compare?

- Remember, it's the rate, not the total price that's fixed. So use more, you pay more; use less, you pay less.

- What is 'MSE cashback'? As with many energy comparison sites, some providers pay us to facilitate the switch. If so, you still get the same price as if you went direct. Yet unlike other sites, we don't default to hiding tariffs that don't pay. Instead, when we're paid, we give you a chunk of it as cashback, so those that pay us are relatively cheaper for you, so likely more people switch to them. Win-win.

- The savings are compared to the current Price Cap... what about once it ends? As the graph below shows, currently it's predicted that over the next year you'll pay roughly 2% more than the current Price Cap, so all the fixes above have a lot of wriggle room for things to change and for them still to be cheaper than staying on the Cap.

As we're well over halfway through the assessment period of the April Cap, the predictions are firming up at a rise of between 3% and 5% depending on the source. Yet the further out you go, the more crystal-ball gazing (and subject to change) predictions are.

- Is it worth fixing longer? First, that depends on you. If you want price certainty, a longer fix gives you that for longer. It also means you don't have to deal with switching as frequently. There are some even longer fixes available, but the only price predictions we have to compare against only go just beyond a year out, so it's unknowable if they'll be winners.

The key is 'what happens if things change radically.' If prices rise, then a longer fix is great, you're protected longer. If they fall, say due to a worldwide recession, then you may want to leave. That means paying early exit penalties. In E.on's case, it's £100 dual fuel, about 5% of a typical annual bill (less for higher users), so it'd need a big price drop before it was worth most paying that to leave over the period, but if that did happen, it's an option.

- Is it worth waiting in case fixes get cheaper? I just don't know. The rate you can fix at moves roughly with wholesale rates, and as with all markets, they're volatile and unpredictable. What we do know for certain is if you stick on the Cap you'll pay more than you would on a cheap fix every day from today likely until at least July and likely longer, so even if you did wait, you'd need a substantially cheaper fix to make up for it. The less stressful move is to fix today, though clearly there's always a chance waiting could win.

While fixing is the easiest option for most at the moment, there are a few newer tariffs worth looking at, especially as they're tough to display via the traditional comparison site model (the team & I are trying to work through how to get it right for the future), so let us walk you through the main ones...

• Rapid change time of use tariffs: Octopus & Tomato. With the Octopus Tracker tariff, rates change daily based on wholesale costs. It's been a big winner: 31% cheaper than the Price Cap on average over the last year, but recently it's had periods of being costlier (especially when wholesale rates are higher).
  
  The elec-only Octopus Agile tariff's rates change half-hourly, based on wholesale prices, so much so it can be free or even pay you to use energy in the middle of the night, or very costly in peak times. It's good for sophisticated users - those who can shift their usage nimbly to take advantage of super-cheap times or who have big battery storage. New provider Tomato Energy's Smile tariff works in a very similar way too.
  
  The Octopus tariffs are only available for existing customers, though to get 'em, you could first try switching to the Octopus Price Cap tariff then, once in, switch to one of these.
  
  
• Discounted Price Cap tariffs. This option isn't looking as good as fixing for most right now. Yet if you don't want to lock in to a set rate, they promise to track the Price Cap for a year, but at a lower rate, so you're always guaranteed to be lower than the Price Cap. And some have no exit fees, meaning you can switch penalty-free to another tariff if a better deal comes along. The cheapest two are:
  
  - E.on Next Pledge: Lower unit rate for avg 3% saving over the Cap.
  - EDF Simply Tracker: £50 cheaper standing charges than the Cap.

Several suppliers offer specific tariffs which let you get cheaper electricity overnight for charging your electric vehicle (EV) and sometimes other household appliances. Full details of what's available in our EV tariffs guide, but in brief, there are two types:

• 'Add-on' tariffs where you can only charge your car on the cheaper rate. Ovo and Scottish Power offer these, so you can add EV charging to whichever of their tariffs you're currently on, and you'll get a cheap rate to charge your EV at any time. All other electrical use in your home will be charged at your existing tariff rates. So if you can get a decent fixed tariff from these firms, the fact you can charge your EV even cheaper is a boon.
  
  
• Two-rate tariffs giving you cheaper elec overnight. Most tariffs offer between five and seven off-peak hours a day (typically from midnight to 5am) and charge around 7p to 10p per kilowatt hour of elec use (the Price Cap rate is 23p to 26p). The benefit here is if you've other appliances that you can use overnight, they'll cost less too.

My key focus today is energy tariffs. Yet of course that's not the whole story - our 75+ energy saving tips guide can take you through a host of ways to reduce your energy usage. See Energy mythbusting too.

If you're simply struggling to pay, then the first route is talking to your energy firm. Be polite and straight with it, and make sure you explain if you're vulnerable (and ask to be put on the Priority Services Register). We've detailed guides with more help, including our:

- What to do if you're struggling to pay energy bills guide, which includes hardship & debt grants.
- Heat the human, not the home guide.