|
Should you Switch Energy Suppliers?
The consensus of advice at the time of writing is hang on for a bit; don’t make the switch yet.
It’s a question of wait and see. Two of the big boys have already announced reductions, with British Gas dropping their gas price by 10% and Scottish & Southern their gas by 4%, and their electricity by 9%.
And with these two leading the way, pundits believe that the major suppliers behave with a herd mentality, so expect others to follow suit.
Also, experts see the drops from British Gas and Scottish and Southern as almost derisory, given the dramatic increases that were the norm in 2008. And they point out that even with these reductions, consumers will still be paying some 40% more for their energy than in 2008.
So, the general opinion is wait and see which way the market is going. Will the economic downturn and the downward pressure on wholesale prices mean that inevitable cuts will be passed onto the consumer? Or, will the drops in wholesale prices mean that energy suppliers will feel the pinch and, in order to save their own cashflow, try to artificially keep the consumer prices high?
This will be a testing time for the industry’s regulators, who will need to satisfy themselves that the energy companies are not about to exploit the consumer.
There is already concern on two fronts, that certain overseas energy companies see the U.K. as a chance to make some money, while not having the same attitude in their own countries. Many of the energy companies who were once British owned, are now in the hands of foreign concerns and the fears that that they pass on the benefits of lower wholesale prices to their home base first, has whipped interest in a number of the U.K. tabloids. Headlines screaming that U.K. consumers are being exploited at the expense of mainland Europe are now common.
But as more reasoned voices have pointed out, the U.K. enjoyed far lower energy prices than the rest of Europe for many years and the hikes they are now suffering, are only bringing them in-line with their neighbours. Whoever is right, its likely to be an emotional debate.
Secondly, there is concern amongst consumer watchdogs that the energy companies are not only exploiting those on pre-payment meters, but also those paying by direct debit. The poorer members of society tend to pay up-front for their energy via pre-payment meters and do not enjoy the better rates given to those paying by direct debit.
Ironically, those paying by direct debit are also being seen as victims of an attempt by the energy companies to inflate monthly payments by averaging them over a year and then taking the extra cash, especially in the warmer months, and gaining interest in the millions in the bank.
And many of the energy companies seem reluctant to alter direct debits until the year has finished, even though consumers are reading their own meters and proving that they are paying too much.
You can bet, as things get tougher for people and personal budgets become under even closer scrutiny, then consumers will be more vocal in their complaints against harsh tactics by the energy companies.
As to whether the energy companies are in the right, or wrong, only time will tell, but most companies operating within Europe are strongly regulated, so the idea that they are intentionally devising strategies to benefit from customer payments, might be hard to prove. Although, they not rush to correct an accidental benefit from certain practices.
So, don’t switch yet. The best thing to do is wait and see, and look at your bill closely. Make a habit of reading your own meter and don’t rely on estimations. And if you feel that you are being cheated, complain to your energy supplier and if they don’t agree, go further and speak to the ombudsman.
Don’t become a victim of the energy companies. Be canny and see what’s going to shake out in the next few months.
| |
^Top | |
 |
© 2012 | An Affiliate of British Gas |  RSS |  |
|
