Winter fuel bills hit record high

Millions of households have been hit by record winter fuel bills of more than £500. Follow our five tips to fight back!

If you’ve just received the highest winter fuel bill you’ve ever had, you’re not alone.

According to research by energyhelpline.com, the average household is now facing a fuel bill of £532.70 for the last quarter of January to March - £57 up on last year’s record of £475.

Energy companies say the recent cold snap is to blame for the act that bills are at a record high.

But in total the average household has seen a 50 per cent increase in their bills over the past two years. And, with more cold weather on the way next week, heating bills look set to remain high for the forseeable future.

If you’re sick and tired of paying rip-off rates while energy companies rake in the profits, it’s time to switch tariffs. The longer we sit on our existing energy tariffs, the more expensive they become relative to the newer, cheaper deals that appear.

Yet it's not a matter of looking on the supermarket shelf and buying the cheapest new tariff you can find. Suppliers have thousands of tariffs with varying price structures, and the terms and conditions, and the quality of service, can be noticeably different. What's more, whilst we can be confident of making savings by switching every now and then, we can't be sure we're getting the best deal for us unless we do a bit of homework first.

So here are my top five energy switching tips:

1. Start saving your bills

You can get a more accurate comparison if you save your bills, ready to input exactly how much energy you have used into an energy comparison tool using the kWh figure. So start filing your bills, not binning them.

• Watch: Slash your energy bills

2. Look for the exit

Somewhat like learning where the fire exits are, it's worth looking how you can exit your tariff before you sign up, as there can be some expensive exit penalties and other tie-ins. When you've found the cheapest deals, you then need to see which of those have the best exit terms. Some comparison tools, such as lovemoney.com's, will have links in the results tables that show clearly any exit penalties that we've noticed.

Read how to understand those tie-ins in Avoid these massive hidden energy charges.

3. Look at customer satisfaction

We know that lovemoney.com readers are increasingly interested in how good the service is. I've done my best with the complaints and enquiries data from the Energy Ombudsman, as well as some data from the energy suppliers themselves to come up with a score, Neil's Score of Customer Satisfaction!

Customer complaints, enquiries and satisfaction levels

The numbers in the two percentage columns may not add up to 100% because sometimes a complaint or enquiry involves more than one supplier, and I have excluded British Gas business accounts.

*All part of the SSE group, which includes a few smaller 'Other suppliers' too.

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It's a crude measure as the Energy Ombudsman's survey was quite small, but I think it's better than nothing. If there's not much in it, price-wise and exit penalty-wise, you could take this score into account.

• Follow our step-by-step guide to lower your household bills.

4. Consider how safe the supplier is

After all that, if you still have a few choices on your shortlist with a similar price, exit penalties and satisfaction rating, consider how safe you are with your supplier.

New suppliers have been getting feedback recently, but have a dire history. As far as I recall:

• Amerada was sold.
• Atlantic Electric and Gas went bust, and the name was bought by SSE.
• Countrywide Gas and Electricity was closed.
• Zest 4 went bust.
• Imperial Energy went bust (a long time ago now).
• Utilita refocused on a niche market (smart prepayment).
• Utility Warehouse nearly went bust and survived with the support of npower.

When a supplier fails, another supplier will generally take over the accounts. However, if you have any credit with your failed supplier (and most of us direct debit are in credit) you will have to join the list of creditors trying to get money back from the business.

Even so, I'd put relatively little emphasis on this tariff selection criterion, which is why it just comes fourth place in the event of a tie for my first three criteria.

5. Fix or stay variable

Now we come to the fifth criterion, whether to go for a fixed tariff or stay variable. This choice should be fairly simple, but I'll spell it out anyway. If it would be a problem for you were energy prices to rise, you should look at fixing, so long as the cost of fixing for you isn't much higher than the cheapest tariffs. If the fixes available to you are expensive then it doesn't make sense to fix, but if the fix lasts two or more years, you could justify paying somewhat more for the piece of mind. Otherwise, your choice is down to your own personal preference.

Finally, remember that if your bills are getting the better of you, you can learn to budget effectively using lovemoney.com’s brand new online banking tool. It enables you to categorise all your bills and transactions from different bank accounts and credit cards so you know exactly what you're spending your money on throughout the month, using a single log-in. Find out more

More: You're making the same mistake again | Slash your energy bills

Compare gas and electricity tariffs at lovemoney.com.