With gas and electricity prices rising and set to continue rising for the foreseeable future and with the state of the economy and Government cutbacks squeezing everybody’s household budget it makes sense to look at our monthly gas and electricity payments to see if they can be reduced by a few pounds.
Paying by direct debit is a good way to manage finances. Most energy companies offer a discount in return for paying by direct debit and it also allows you to spread payments over twelve equal monthly payments. The down side is that you could end up paying more than you actually should.
Check How Much You Should Be Paying for Gas and Electricity
The first thing to do is to check how much you should actually be paying. Energy companies calculate your monthly direct debit payments based on usage in previous years or, if you are a new customer, on an estimate based on an “average” user in a similar situation to you (size of house and of household etc). Energy companies tend to over estimate usage which means you may be paying more than you should.
The first thing you need to do is to work out your actual usage. If you have old bills to hand, that are based on readings rather tan estimates, have a look at these. If you don’t then you will have to take measurements. You will need to do this for a period of at least six months as obviously usage varies greatly between the winter and summer months.
Once you have your actual usage, go on a price comparison website and find your energy supplier and your tariff. Check the price per kWh. Work out your average monthly usage by adding together 6 months worth of readings and dividing it by 6. Multiply this by the price per kWh to get your monthly payment. You also need to take into account any credit or debt you have. Find this out from your provider. Divide this figure by 12 and if it is a debt add it to your monthly payment, otherwise deduct it. The result is what you should actually be paying each month.
Ask Your Energy Supplier to Reduce Your Payments
Assuming of course you are paying more each month that you should then, armed with your calculations, approach your energy provider. They are likely to be reluctant at first. After all, by paying more than you should you are basically providing the energy company with an interest free loan! Stick to your guns though. The company is not obliged to back down and reduce your payments however if they are not prepared to then you can always vote with your feet!
Switch Your Energy Supplier
If your energy provider will not reduce your payments then advise them you will be switching provider. The threat itself might be enough to sway them but if not then find an energy price comparison website and a cheaper tariff. Switching is quite simple and could you save you a lot of money in the long run.
It will take about a month to complete the switch as a rule. Remember that if you are in debt you will need to pay any balance owed in full when you switch. If you are in credit then make sure you do get any money owed to you back.
This is really helpful information. Search and find the best supplier online.