Mortgage and homes in depth
Switch your provider with confidence
March 2007
British Gas laid down the gauntlet when they announced that on March 12th they will drop their prices after almost seven years of hikes, and naturally their competitors have already risen to the challenge by breaking out the retalliatory offers. As a result, the newly fertile ground of the energy market is ripe for the picking
Online switching and comparison websites mean that changing your domestic provider is far easier than it has ever been, saving you money at the touch of a button. However, recent specualtion about biased best-buy tables has fuelled a rethink of the energywatch Confidence Code.
First set in place on 9 December 2002 by energywatch, the independent gas and electricity watchdog provided by energy regular Ofgem, and revamped on 19 December 2006, this code of conduct promotes a more reliable service from the range of switching websites available to British consumers.
Tim Whittle, energywatch manager and author of the Confidence Code, advises consumers: “All the accredited sites have participated with a rigorous, comprehensive and independent audit process to ensure that consumers can have confidence in the services they provide. They will be monitored, and should any fall below the code standards then they risk having their accreditation withdrawn.”
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Affiliated sites must be independent from any energy supplier, must display impartial information and must not give preference to suppliers with whom they have a particular financial arrangement. This means that an energy company who tops a best-buy list on a Confidence Code affiliated site will do so because the deal they offer is the best, and not for any other reason.
The main aim of the Code is to make sure that online switching remains impartial. Once affiliated, websites are obliged to offer accurate and reliable information to the consumer without bias. If they fail to uphold these values then the association will cease. In short, you can rest safe in the knowledge that you are not being intentionally mislead. If the switching site has a particular deal with an energy supplier, they are required to be upfront about it and there will be a disclaimer on the site which explains the nature of the business relationship.
At the end of last year, the switching website uSwitch came under fire from the watchdog after featuring a deal from Powergen more prominently than a similar one from British Gas – artificially creating the impression that Powergen was the better option. This has been attributed to the fact that the latter were paying uSwitch commission, whilst British Gas were not – something the company vehemently denied.
There are currently twelve sites accredited to the Code: energylinx.co.uk, energyhelpline.com, homeadvisoryservice.com, MoneyExpert.com, moneysupermarket.com, saveonyourbills.co.uk, simplyswitch.com, switchwithwhich.co.uk, theEnergyShop.com, ukpower.co.uk, unravelit.com, and uSwitch.com. These switching sites will sort out everything for you, all you need to do is input your details and confirm that you want to switch – you don’t need to change any connections/meters or install anything new.
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Considering that almost half of British households have never switched but the average one could save £250 each year after simply shopping around for a matter of minutes, the Code has given sceptical homeowners even greater impetus to see what else is on offer.
After the domestic energy market deregulated in the late 90s, energy companies have been free to compete against each other on price, whilst consumers were given the freedom to change suppliers and thus offset market fluctuations.
In the past three years residential energy prices have risen by more than 70 per cent, even though the price of wholesale energy has seen a decline. Mid-February’s dramatic price slashing announcement from British Gas has already got Powergen and Npower snapping at its heels in a bid to be the cheapest provider.
However many people will deal directly with one particular supplier, not realising that 5 minutes spent on a switching website like the aforementioned ones could actually turn up a better deal, with some even offering a cash-back facility if you switch through them rather than a competitor.
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Energywatch also recognise that truly ‘green’ energy suppliers are thin on the ground and considering that a lot of consumers would happily pay a premium for an eco-tariff, a lot of those around don’t actually live up to their environmental claims.
Unfortunately all suppliers on the market today, whether classed as green or not, fail to point out that every UK household is already supporting renewable electricity to the tune of £7 per year through their normal bills. Sadly neither this £7 nor a company who proposes to plant a tree for every customer will counteract the average household emissions anywhere near enough to offset them.
Adam Scorer, director of campaigns at energywatch says: “It seems bizarre that in the age of green consumerism only 1 per cent of consumers are signed up to green energy tariffs, but dig a bit deeper and you can see how maddeningly complex and confusing some of these products are. Energywatch has produced a factual guide that explains exactly what consumers are signing up to when they choose a green tariff.”
Energywatch recommend Good Energy (good-energy.co.uk) and Ecotricity (ecotricity.co.uk) for those looking to pay for household energy that really gives a little back. To be properly green though, an eco-friendly tariff should be combined with lessened energy consumption through proper insulation, turning your thermostat down on the heating and using low-energy appliances.
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