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Scottish Power increase prices, but I’ve got the power to leave

Energy prices sign

Don’t all laugh at once, but I’m with Scottish Power, the energy company that’s just announced price rises of 19% (gas) and 10% (electricity). And if you think that’s bad, just wait until your provider follows in their footsteps.

I’ve got a confession to make. I’m a serial energy switcher. Ever since I had control over my own bills I’ve hopped from company to company without so much as a smidgeon of loyalty.

When it comes to other products and services I’ll happily pay a bit more for a brand I love, or a service that I think is decent (take a bow, Virgin Media), but with energy companies there’s nothing to make me stay when the price goes skywards.

With energy companies I have never noticed any difference in service – only in price. Poor customer service, confusing bills and a bewildering array of tariffs – should I go for the ‘Fixed Eco Net Doubleplusgood’ tariff, or the ‘Mega-Discount 14 Saver’ tariff?

That’s why the second I saw the announcement that Scottish Power had hiked prices again, I headed straight to Which? Switch. Loyalty doesn’t help me save cash, and when it comes to energy I’m all about the money.

Paying the price of staying put

I know the old argument – switching takes ages. It’s time-consuming, it’s a hassle, and you can’t even guarantee that your new price will be a bargain beyond the first couple of months.

Perhaps I’ve been lucky, but I’ve never found it that difficult to switch. Yes, I’ve had problems, the most notable being when npower and Scottish Power found it impossible to talk to each other, and insisted on both charging me for the same batch of electricity. But they got it sorted out after a couple of emails, and it was worth it to get onto a cheaper deal.

And it will be worth it again if I can switch to a cheaper deal. With price increases of almost 20%, the average household’s energy bills could rise by £175 per year. I think that’s worth a few phone calls and a bit of hassle.

Will you be swayed to switch?

I understand people who don’t want to worry about the hassle, but I think we often assume that switching is like a perilous mountain that will take eons to scale.

First you find a cheaper deal, then you put in all your details, then you switch. After that you wait months and months for your energy company to sort things out, while you take an almost infinite number of meter readings and phone them every five minutes to make sure they haven’t accidentally cut you off or hurled your details into a fiery pit.

Well, I’m here to tell you that it’s annoying, but not that annoying, and it’s definitely worth it to save nearly £200 and feel smug when you read headlines like: ‘£220 shock on your bill’ or: ‘Families stunned as power bills soar to £1,391’.

So what about you? Energy bills are one of the big financial concerns for UK consumers. Is there anything that could make you stay with your energy company, besides the price? And are these latest hikes going to sway you into switching?

Comments
Member

I would like to correct some mis-information in Nikki’s article;
There are indeed some “brands” which customers can feel loyalty to. These are all smaller companies such as Ecotricity, Good Energy and Green Energy. As a customer of Ecotricity I know that I will not be ripped off, will not want to change supplier, will have my phonecalls answered straight away by someone in the Stroud office (no call centres abroad), and above all can use electricity in the knowledge that most of it is definitely from a low carbon source (the big companies may make this claim but their record is dubious). Ecotricity (and the others mentioned as far as I know) plough ALL of their profits back into renewable technologies. No creaming off to shareholders or massive bonuses to directors. Using small ethical companies is definitely the way the way forward for the ethical consumer.

Member

Hi organicrad. It’s good to know that you’ve found someone who you do feel that brand loyalty towards, and it’s nice to see that an energy company can get it so right that a customer is willing to recommend them. Our most recent energy survey showed that energy companies are generally less trusted than the banks, with just a quarter of UK people saying that they trusted energy companies – it’s good to see that some of them are working to earn trust back!

Please don’t use the word ‘mis-information’, though – my article was about my personal feelings towards energy companies, and I pointed out that I don’t have any brand loyalty towards them. That doesn’t mean that I think no one does, or that no one should!

Member
Robin says:
12 June 2011

I have taken a lot of trouble over the years to find the best deal. At the moment I use SP’s “Pay in Advance – Domestic”. This saves me 5% on top of the best monthly direct debit rate that I have managed to find. Nevertheless I continue to visit various websites to compare energy prices. After I have completed all the tedious questions – Surprise, Surprise, all of them come up with a response that they can save me £200 here and £300 here by changing to companies that I KNOW are not competitive as the deal I currently have. So what is the racket that the energy comparison websites operate! I have come to the conclusion that they operate a flawed software system. Even if you submit your correct tarrif rate, the comparison websites always calculate using the most expensive rate that your current company offers. (honest software error Guv! a complete accident, not deliberate. Cross my heart) Naturally using this “system” there are plenty of companies that are cheaper. The software then tells you how much money you will save by changing to the new company. The comparison websites NEVER tell you the rate that you will be charged for this electricity or gas so that you can actually compare apples with apples. The punter is so excited at saving all this money that they rush to change to a new energy supplier and the website earns an easy £60 from the company for recruiting a new customer. The websites do not print out a report that gives the facts. Remember you have just spent 10 minutes supplying all the facts needed for a comprehensive report. They should be able to print out a report that says You are paying for x amount of energy and your current rates are y. This adds up to an annual total of z. (i.e. you should check for yourself that the baseline is accurate). The report should then say, if you change to this company their rates are y1 and for the same amount of energy your total bill will be z1. – A saving of z – z1. This report could be generated so easily. There has to be a reason they don’t do it. Is it because the system is dishonest?

Even the Which energy comparison website operates this “system”.

Nikki I would love you to tell me that there is a comparison website that does print a good report, because if there is, I have not found it.

Member

Hi Robin – I’ve passed your comment on to one of my colleagues from Which? Switch who’ll be able to give you a fuller answer than me!

Member

Hi Robin.

Sorry to hear you’ve had bas experience with switching sites! Which? Switch works by using the rates of your current tariff and calculating an annual spend based on what you tell us about your usage. We will always use the rates for the tariff you tell us you are on so that the quoted savings are as accurate as possible. We also allow you to see a comparison page for every tariff which sets out the rates of your current tariff versus another one on the market and shows how the annual saving has been calculated- to find this use the ‘Compare to current’ link against tariffs on the results table. We take providing accurate and reliable information very seriously and our calculation system is accredited by the Consumer Focus Confidence Code.

Member

Having done the maths (and seeing comments on other forums) I’m wondering who’s getting the 10% & 19% rises? According to my maths, my electricity increase 53% for the first rate, and 38% for the second. For gas it’s 56% for the first rate and 69% for the rest. And this is a rate guaranteed to be 2% lower than their standard DD prices. As I mentioned above we’re not exactly high users, but a year at these new prices will push up to nearly £600 a year (we have a 1-bed, are out most of the time and wear lots of jumpers and blankets in the winter). I’ve estimated the difference per day as jumping from £1.05 to £1.60.

Having compared to the prices Co-op are quoting, if they don’t up their prices they will actually be cheaper than Scottish Power.

Member

Hmm… so looks like I can’t do maths of an evening. Anyway, still works out as there are other tariffs cheaper than SP so maybe will switch. Potentially would save more than the cancellation fees by moving too, so might be worth it. Will have a look at cash back options.

Member
gazzer says:
14 June 2011

I received a letter this morning (14th June) from my supplier, nPower, dated “May 2011”, which started “as you know the introductory period for your online tariff came to an end on 31st March 2011.” And then goes on to tell me that they have kindly transferred me to their standard tariff from that date. I realise that I have some responsibility to remember when a special offer ends, but the comapnies don’t make it easy:
– there is nothing on their bill to state when a particular offer will end
– even worse, on my latest nPower bill (15th March) they predict energy costs for the next 12 months based on the special tariff that is about to end – and which is no longer available
– the only way to know when a special rate is about to run out is to search the e-mails for the past 12 months to find out the date the new tariff started

The solution is for suppliers to put the date of expiry of any special offer on the bill – given that my bill is 8 pages long already that should not be a big deal!

Does the recent change which requires energy companies to advise you a month in advance of a change in price also apply to price changes when special offers expire? I hope so, but somehow I doubt it…

I could make the same point about banks and building societies who offer 12-month ‘bonus’ rates, but then make it almost impossible to find out when the current rate is about to expire. I’ve been caught out recently on this as well.

I count myself as reasonably savvy and on the ball, but keeping track of the dates when spec