How To Be A Utilities Rate Tart

First we had credit-card tarts: Fools who constantly swapped to the best deals. Now we consider if it's possible to be a gas and electricity tart!

British Gas has lowered its gas and electricity prices twice already this year (although it is still expecting to beat current profit forecasts, because the cost it pays producers for gas and electricity has plummeted).

Suppliers change their prices regularly, which has led me to consider whether it's possible to be a utilities rate tart, chasing cheaper prices. Generally, I can't be bothered. I'm happy to switch roughly once a year, just to make sure I'm not languishing on an old expensive tariff when a new, cheaper online one might have appeared.

However, I know that many people are keen to give these companies as little of their money as possible so, if I was to be a true rate tart, here's how I might go about it.

Don't time the market

Hmm, firstly what I wouldn't do. I would suggest that a rate tart cannot afford to try timing the market (a practice that The Fool generally doesn't think highly of in any area, be it gas, property or stocks and shares).

If you try waiting for all suppliers to increase or decrease their prices before you switch, it means you might wait many months for them all to get into line and, in the meantime, lose out on several months of lower rates. Plus, by the time the last of the big six has changed, the first is usually on the verge of announcing another change, so it often seems like a never-ending cycle!

Adjust your calculations to the seasons

As it takes at least a month to switch suppliers, I can't see that it would be advantageous for a rate tart to switch more than twice a year. If you're planning to switch more than once a year, I think you should not be looking at your average yearly usage. you should look through your past bills and see what your typical usage is like over the next six months. When you've got that figure, multiply it by two, and enter this into our gas and electricity search tool.

Use the most advanced comparison on the Web

You cannot expect to be a successful rate tart if you don't know your tariff and the amount you use. By this, I mean you need to know what discounts you get, the standing charge, and the cost per kWh. You might be able to find this in your paperwork, or you can give your provider a call.

You can enter these details in our gas and electricity comparison tool. On the second page you can click on 'Variable tariff search', which will give you the most accurate price comparison on the Web. The results include all discounts (such as for dual fuel or paying by direct debit) except introductory discounts. By clicking on the name of the tariff you can see the introductory discount, terms and conditions, and any reward points you get.

Compare prices after your supplier has announced price changes

As I said earlier, timing the market is a dodgy business. I think you should stick with what you know, instead of trying to predict if and when your supplier, or other suppliers, are going to change their prices. Use the known facts you have to make a decision that is almost certain to save you money more quickly.

The one thing you do know is whether your supplier has announced changes recently and what those changes are. You also know what the other suppliers have already done (especially if you use our Price Change Calendar).

So I reckon the simplest thing to do is to wait for your current supplier to announce a price change. If it's lowering prices, compare its new price with all the competitors and switch to the cheapest. If its prices are going up, compare its prices with all the providers that have already announced increases. This way, you limit the possibility of switching and having your bill put up straight away.

Suppliers are now in the habit of changing their prices two or three times a year. However, if this changes and your supplier doesn't announce another price change for over six months, you'll need to compare prices again anyway. This is because your usage will be different for the next six months and therefore another provider will probably be cheaper. Also there will likely be new, cheaper tariffs targeting new customers only.

Doing this, I reckon overall you'll be better off. If I wasn't in the habit of packing up and moving home every year or two I'd test out this theory myself. But, as it stands, it's just a theory. If anyone wants to give this a go and give me updates on progress it could be very useful to a lot of Fools!

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> Read more: Save Money With British Gas's Hidden Tariff! | Are Gas And Electricity Comparisons Accurate?