Is It Time To Switch Gas And Electricity?

With British Gas lowering prices, learn why 10 million could save 25% by switching now, but even more people should hold off from changing suppliers.

As winter comes to a close, we're going to start using less gas. The energy companies will take their fat profits and finally pass on to customers part of the huge drops in wholesale prices that occurred last year.

Powergen got in early with a significant 5% discount back in November. (Unfortunately recent rumours of them lowering prices further are unfounded. There was a brief blip whilst Powergen repackaged its cheapest tariff, then it was reintroduced. It's actually about 1% worse than it worse in November.)

In January, three companies announced some modest changes, as I said in Three Gas Companies Lower Prices! Now British Gas has set the bar with the biggest cuts yet: 17% for gas and 11% for electricity from 12 March. (Just like Powergen though, remember that BG increased electricity prices by 8% in early January, so the savings are more like 17% and 3%, really. Boo!) So is it time for us to compare utilities prices and switch tariffs? Well, it depends...

If you're not with British Gas, should you switch?

For most consumers, British Gas's Click Energy tariff will now be the cheapest or very nearly the cheapest. (You can find out how your provider compares with BG and the rest if you compare utilities prices here.) However, the big competitors have been using British Gas's high prices as an excuse for not lowering their own.

So the question is: 'How long will BG's non-standard tariff remain the cheapest?'

The answer is probably not many weeks. So most people will probably prefer to wait and see, rather than cash in on the savings now.

If you're with British Gas, what should you do?

If you're already on British Gas's Click Energy tariff then you should soon start reaping the rewards. However, 10 million BG customers have never switched, which means you're on their more expensive tariff. If the only reason you haven't switched is because you're new to this whole switching thing, then you might want to wait and see what the other providers do first.

However, you may be one of the many millions who have never switched because you don't want to risk changing suppliers. I don't think that BG deserves our loyalty, but if changing suppliers is a concern for you, you can still make savings simply by switching to BG's cheaper Click Energy tariff. (Read more in Save Money With British Gas's Hidden Tariff!) If you combine the price decrease with this switch, you should save roughly 25% on what you're paying right now!

> Take a look at what other Fools have to say about British Gas on our Utilities discussion board.
> Our comparison tables have already factored in British Gas's new prices. Compare utilities prices to see how BG fares for your household.