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In the past few weeks, British Gas has been pushing some creative benefits to attract new customers to its gas and electricity tariffs, including more control over your direct debits, interest-free payment holidays, free insulation and Nectar points. Let's see how good these benefits are, and whether its competitors can do better.
Ease the burden of paying for Christmas
British Gas customers with online accounts can now choose what they want to pay each month, subject to credit status. Unfortunately, they don't mean you can choose to pay nothing at all every month! Your bill will be the same overall, it is just that you could choose to pay slightly less in months where you have high expenditure in other areas, such as Christmas time.
You can also have two months where you pay nothing at all, provided you make it up in the other ten months.
As far as I can see, any special payment options from British Gas' competitors are rather gimmicky and don't save you money or make life particularly easier. However, there is one provider that has an innovative idea on payments that is worth highlighting. I wrote about how you can be paid interest when you're in credit with Ovo Energy in Earn interest from your energy supplier, so be sure to check that out.
Get Nectar points
British Gas is also offering Nectar points in partnership with Sainsbury's Energy.
According to EnergyChoices, Sainsbury's Energy used to be run by Scottish Power and then EDF Energy. It's changing partnerships every five years, so now it's British Gas' turn for a five-year contract.
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With the possibility of further energy price hikes later in the year, now could be the time to lock in to a fixed tariff.
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Dual fuel customers who sign up to British Gas through Sainsbury's Energy will get up to 10,000 Nectar points, plus potentially a few thousand more each year. Single fuel customers get roughly half as many. However, there is no mention of the other British Gas benefits, such as flexible monthly payments, being available through Sainsbury's. What's more, it appears that Sainsbury's Energy is basically British Gas's standard tariff. For those of you who don't know, energy suppliers' standard tariffs are extremely expensive, and they're reserved for those who have never shopped around or who don't shop around after moving home.
Using a post code in Farnborough and average energy usage, for example, British Gas's (and therefore presumably Sainsbury's Energy's) standard tariff costs about £220 per year more than the cheapest offer. 10,000 or so Nectar points may sound a lot, but they aren't worth that extra annual cost.
According to the E.ON website, its customers can receive Tesco Clubcard points at a rate of one point per £2 spent on energy. However, looking through the small print it appears that anyone on a cheap tariff is not allowed them.
It seems to me then that, if you're getting points, you should be concerned about the tariff you're on.
Free insulation
British Gas will install either free loft or free cavity-wall insulation to 200,000 dual fuel customers on a first come, first served basis before 31 May. That is in addition to its existing and ongoing offer of free loft and cavity-wall insulation to the over 70s or those on qualifying benefits.
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For those who don't qualify for free insulation, British Gas has agreements with nearly 60 councils for you to receive a rebate of £125 on home insulation. This offer is available to all, not just British Gas energy customers. It's a large discount, but compare prices with other insulation installers.
British Gas reckons loft insulation could save you up to £145 per year and wall insulation £110, potentially paying for themselves within just one to three years. With half the country receiving price increases this winter (read 10 million energy bills rise), those savings could be particularly useful. You're also reducing your carbon emissions by around 730kg per year for loft insulation and 560kg per year for wall insulation, according to the Energy Saving Trust.
As far as I can see, there are no other providers offering anything like this. Npower offers 50% cashback if you don't claim on its boiler insurance. It has a couple of pricing plans. Bearing in mind the age of your boiler and the terms and conditions you want, I think this could prove the best option for some, but do your research and shop around.
If you want more ways to cut down your costs, read our guide: Cut your energy bills. Please let me and readers know in the comments below if you think I've missed any energy supplier benefits that are likely to save time or money.
More: Compare gas and electricity | Save £10,000 on your energy bill | Can energy-saving devices save you money?
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As with the way the markets are going at the moment it seems that a fixed rate deal is the best option. The reports recently that a supplier now has to give 30 days notice is a blessing and with pressure being placed on the larger suppliers the consumer could find it easier to get the best deal and price easily.
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I switched to utilitywarehouse 3 years ago. They offer a cashback scheme on a large number of retailers. On average 5% of our grocery bill per annum comes off my utility bills. With a large family of 6, my grocery bills and other expenses at the other stores which used UW saved me £600 in the last 12 months on my utility bills. I have 4 utilities with them, gas, electric, telephone and internet. My son recommended me to them and he receives 0.5% off his bill for every utility I have, so he gets 2% off his monthly bills in addition to what I save. I recommended my daughter, she has saved over £200 in the last year and I save an additional 2% off my bill for recommending her. Recommending people is a very good way to save and I have no problem recommending them because I can justify this by what I've saved and show them the bills to prove it. if you want to switch, please use me as a recommendation and then recommend your friends, use the reference 5210179, I know you will find pros and cons all over the internet with utility companies, but find me a company that doesnt have a single disgruntled customer and I will be amazed. I've never ever had a problem with UW and 3 of my immediate family now use them. If you have a big grocery bill or shop in one of the 40+ outlets that discount (up to 7% cashback) I think you will find this is well worthwhile. You also get one utility bill, which is a benefit, and one direct debit. The cashback requires that you use their cashback debit card, it auto tops up to a limit you decide, although you can do this manually, so if you dont want to leave a balance on the card, you can immedaite call the 0800 number and top up when you want to shop. They guarantee to be competitive to the 6/7 major utility companies, however, I believe you might find some competitor tarriffs 'slightly' cheaper if you look carefully, whatever you find, if you spend in the 40 stores the cashback wins handsdown. Sainsburys, M&S, ASDA, Argos , Comet, B&Q, we are talking mainstream not backstreet corner shops! Anyway, I can happily recommend, I'm sure someone out there will have somethng terrible to say about them, but I've been with British Gas, EON, EDF, in the past, and had my own experiences so all I can say is for value for money and control over your utility bills, this is a very well designed product. I dont work for UW, I am just a happy customer.
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Whether you can stay on the same tarrif or not may depend on how far you have moved. There are different tarrif rates for different parts of the country, each closely equating to the old pre-deregulation supply areas. Also, don't place absolute trust in what they tell you. When I worked at British Gas I learned that the cost you are charged for things is in no way related to the actual cost of carrying out operations - it is simply a figure the company has pulled out of the air which it thinks will make it a profit and which it believes the customer will accept. Also, with regard to direct debits, when I worked there we were all told that standing orders had the same legal status as direct debits and there were always a few standing order forms available in addition to the vast numbers of direct debit forms which could be sent out. However, we were told that we were always to ask customers about direct debits but never to mention standing orders unless customers asked us first. The reason for this was that standing orders gave the power over payment to the customer, whereas direct debit gave the power to British Gas and at the end of the day, what they wanted was not so much your custom as your money. I doubt that that has changed much.
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02 May 2011