Oh poor, poor neglected blog - and after all the love I showed it last year, too! There you go - this is what a return to something approaching normal life does. Again for the benefit of anyone reading later, we’re still in the Covid-19 pandemic, but with nearly 70% of the U.K. population now vaccinated, in a rather better place than we were this time last year.
Anyhow - what better way to come back than with a Frugal Friday post (albeit belated) and what better time to write a Frugal Friday post than when the U.K. is facing an energy crisis? Electricity and gas prices have sky-rocketed over the past few months, and the myriad energy companies who were relying on clawing in customers by offering “cheap” fixes are now struggling as the wholesale price they pay have exceeded the price they are selling the energy for. We now have less than half of the energy supply companies in the market than we had this time last year as many - and even some decent sized ones - have gone bust.
So - if your supplier bites the dust, what can you expect? Well the first thing is that there’s no need to panic, you’re not going to lose your energy supply and be left without lighting or heating! You will be transferred to a “Supplier of Last Resort” - SoLR - yes, your prices will probably increase, but everyone’s prices have increased, so consider yourself part of a pretty big club! Your supply will continue unaffected - and credit you have on your account will be transferred to your new supplier - you won’t lose any money so don’t worry, although getting everything squared away will probably take a couple of months. Don’t cancel your Direct Debit unless you are specifically told to either - it will almost certainly be transferred to the new supplier, and continuing to pay means you won’t end up with a big bill to pay.
So what if you’re on a fixed rate deal that’s about to end? You should fix again, pronto, right? Well, usually, no. With the price of energy as it is, currently the cheapest tariff to be on is your supplier’s standard variable tariff (SVR), as that will be set at the price cap - currently almost without exception any fixes that are being offered are hundreds of pounds mor expensive. (The exception is from a couple of small providers who are extremely likely to go bust any day - and being mid-switch to one of them when they DO go is not a great position as that almost certainly WILL hold up you seeing any account credit you build up.)
Essentially, right now we are in an unprecedented “do nothing” situation. If you’re still on a fix that started back in the summer, stay put, it’s likely to be cheaper than anything you will get now. If your fix is ending, do nothing - let yourself roll onto the variable (capped) tariff, and if you are moving into a new property, contact the existing supplier and resist all their efforts to convince you that you need to sign up to a fix! There are awful tales out there of people being told they can’t go onto the SVR and the only tariffs available are fixes - this is nonsense, and all you need to say is “no thank you” - they don’t have a choice. Remind them that they should not be treating you as a new customer - you’re not, you are simply taking over the supply already in place in your home. Pass on your opening readings as usual, make very clear you want to go onto Direct debit, and make sure that you put in meter readings monthly if you’re not on a smart meter as your use may be very different to the previous occupiers.
Next week, with the weather now getting colder, expect a Frugal Friday post from me on things you might be able to do to save energy - even if you don’t need to do it from a financial standpoint (lucky you!) we should all be trying to reduce our energy use from an environmental point of view anyway.