When is a saving not a saving?
29th September 2016
When it’s over-promising.
As a new energy supplier, we’re working hard to fix the problems of the industry. We’re taking extra care to make buying energy easy for our customers and our prices completely transparent.
But not everyone is doing the same.
If you’re called by your old supplier midway through your switch, consider their offer carefully. Here are three questions to ask to make sure their deal is worth taking:
1) What are the unit rates and standing charge?
Unit rates are the price you pay per unit of energy you use – if you use more, you pay more, and vice versa. If your old supplier reduces your monthly Direct Debit but keeps unit rates the same, you might not have enough in your account to pay for all your energy.
Your old supplier might also divert your attention from unit rates to the standing charge. The standing charge is a flat daily fee that stays the same no matter how much energy you use. If your old supplier's standing charge is cheaper than ours, they might use this to persuade you to stay, but it has much less impact on your bill than unit rates.
2) Can I have full tariff information, including the annual usage estimate?
A full tariff breakdown will show your unit rates, standing charge, and annual usage estimate.
As far as usage goes, we use what you gave us during the sign-up process, which is either your own figure or the Ofgem Low, Medium, or High values. If your old supplier hasn't asked for a usage estimate from you it's definitely worth checking their savings are on the right basis. If they've underestimated your annual usage you could find yourself with a hefty debit to clear at the end of the year.
3) What tariff will I default to once the current deal ends?
If, after doing all of the above, you find legitimate savings, we have one more piece of advice – many suppliers move you to a more expensive tariff at the end of a cheap fixed deal, so if you forget to switch or ask for a better price, you could end up paying more down the line. We covered this extensively in our blog and on the BBC's Money Box program. Perhaps not a big deal if you're a regular switcher, but if you're after long term value, you'd be better sticking with us.
It'll be some time before the industry is truly open, so in the meantime stay vigilant – some deals really are too good to be true.
Hey I'm Constantine, welcome to Octopus Energy!×Close window