When switching gas and electricity providers, how important is it to get the timing right?
Last September, in The Best Time To Switch Gas And Electricity, I talked about timing when you switch suppliers. At that point, I speculated it was a good time to switch. Once more, some pundits are suggesting that now may again be the right time. However, I want to consider this whole switching business from a different perspective: should we be trying to time the switch at all?
In the past year, the majority of gas and electricity suppliers have announced changes to all their tariffs at least twice and in some cases three times.
But the thing is that price changes are staggered. In a round of price changes, by the time the last of the major suppliers has changed its prices, one of the first to change has already decided to change them once again. This rippled effect can leave people confused.
Take one look at our Price Change Calendar and you'll see the constantly rolling changes. To take a recent example, British Gas reduced its prices in early February, followed by Scottish and Southern Energy at the start of March and then Powergen from the end of this month. That's three months between them. Some providers are yet to announce how much they're going to reduce prices by, if at all.
You could keep waiting until prices settle down, but prices have moved around a lot for several years now, so you'll quite possibly be waiting in vain. The result could be that your bills remain higher for many months than they otherwise should.
When it comes to timing the gas and electricity market, it's all guesswork. We don't know when or if suppliers will change their prices, or how much they'll change them. Will your provider change prices as soon as you switch? You can't know.
You can remove the uncertainty by switching to a tariff that you know is cheap. Consider going for suppliers that have recently adjusted their prices. If one company has just lowered prices beneath what you currently pay, or if it's just raised prices by less than your own supplier, you know you can save money.
Also, suppliers are constantly changing the tariffs they offer new customers but they don't put as much effort into retaining existing customers. If you languish too long on your existing tariff, your tariff could slip gradually further away from the best deals, as you miss out on the latest discounted products.
For all these reasons, perhaps it's best to stop guessing so much and decide simply to switch once or twice a year. You could set a rough time of the year to switch and allow yourself a month or two's leeway either side. Put the date in your diary and pick the best deal at the time. But don't keep sitting on tariffs which could become more and more uncompetitive.
Finally, most people get both their gas and electricity from the same supplier, but this isn't always the cheapest option. Next time you switch, get quotes for both dual fuel (i.e. both gas and electricity from the same provider) and for gas and electricity from separate providers.
More: The Reason We Have High Gas Bills | Compare Gas and Electricity