Three of six best buy energy plans eliminated.
Will others follow?
Should you switch energy plans?
In the past, consumers have had the luxury of waiting for one tariff to end before selecting their next energy plan. In some situations the new plan would offer a better discount, in other situations the discount may not be quite as deep, but the tariff would still be an advantage over the standard plan.
Currently energy experts, such as those at uSwitch.com are growing concerned that the days of best buy energy tariffs may be coming to an end. Recently three of the six best buy energy plans have been eliminated. Although three still remain, the average savings that customers can expect have decreased by £34. If this trend continues, then those who are currently enjoying a discount tariff may find themselves forced to pay standard prices once their end date arrives.
Does this mean that customers should consider switching tariffs early to guarantee a continuation of discounted rates?
The best situation for making an early switch would be one in which you do not have an exit fee and the new plan is actually less expensive than your current plan. In this case, switching now to take advantage of best buy tariffs should be an easy decision.
However it may be a more complicated decision if your current plan does have an exit fee or if your current plan is so competitive that no other plan on today’s market can match it. What should you do? Wait out your current plan and risk the possibility that when your date arrives the competitive plans will have been eliminated? Or switch now to ensure maximum savings in the long run?
To help you make this decision you need to gather a bit of information. First, what is your current energy cost? How long before your tariff end date arrives? What is the exit fee? Next, consider which best buy energy plan that is currently available is the most appealing for you. How long until that tariff end date arrives? Finally, if all best buy tariffs were eliminated, what would the cost a standard plan be?
Now you can create an accurate picture for each of your options – either staying with your current tariff and risking an elimination of best buy plans, or making an early switch to take advantage of current tariffs.
What is the end date for the most appealing best buy energy plan? Between now and that date how much would you pay if you stayed with your current tariff, but were then forced into a standard plan? For example, if the best buy tariff ends in 12 months and your current tariff ends in 3 months you would need to calculate the cost of your current tariff to end date, plus the cost of a standard plan for the remaining 9 months.
Next, how much would you pay if you switched to the new best buy tariff? For example, if the best buy tariff is £895 you would add this figure to the exit fee for your current tariff. Which number is greater? This should give you a good idea of whether switching tariffs early is the right decision for you.
Of course, it is not a foregone conclusion that British Gas and the remaining competitive energy providers will follow suit and eliminate their best buy plans. Although the same market forces that impacted the first three to close their competitive tariffs continue to be a factor, British Gas has not yet indicated that they will discontinue their history of market beating best buy tariffs.
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