All of the Big Six energy suppliers have raised their fuel tariffs ahead of the cold winter months, and that means many consumers could be facing an expensive winter when it comes to paying energy bills. Paying for gas and electricity ranks as one of Britons’ biggest financial concerns, yet many people are still in the dark about how they can save on their next energy bill. While many consumers might assume that they are stuck with paying higher prices since all of the big suppliers have raised tariffs, the truth is that alternatives do exist. Going with a smaller, independent supplier is often the best way of cutting down on utility bills. Although these suppliers may not have the same name recognition as the Big Six, they often offer products that are much cheaper than their larger competitors. This article will look at why independent suppliers are cheaper, and at how consumers can find a cheap energy supplier for their needs.
Why go independent?
There are a number of reasons why independent suppliers offer better tariffs than some of the Big Six suppliers. For one, because they are much smaller they often do not have the same administrative costs as the bigger companies. Furthermore, many independent suppliers take specific actions to further reduce their administrative costs. Some, for example, will only allow tariffs to be paid via Direct Debit or they may only send bills electronically rather than through the post. Such measures lead to big savings, and those savings are often passed on to the consumer. There are more complicated reasons for the lower tariffs as well, however. According to UK regulations, any energy company with more than 250,000 customers has to pay green levies amounting to a couple hundred pounds per year per household. Because the smaller companies are exempt from these levies, they are free to charge a lower rate for gas and electricity. Ironically, however, even though small suppliers do not have to pay these green levies, they are often the best choice for green energy. The reason for this situation is because Ofgem, the energy regulator, has forced energy companies to limit the number of tariffs they offer. As such, many big suppliers have gotten rid of their green tariffs. Some independent suppliers, however, specialize in offering only green products whereby the consumer gets his energy from either renewable resources or sees his energy company contribute its revenue to a carbon offsetting scheme.
How to go independent
For most people, going independent is pretty straightforward. By consulting with any price comparison site consumers can see what tariffs are available in their area. Of course, because independent suppliers often don’t cover all regions of the UK, options may be limited for some people. Also, consumers should be wary before opting for a supplier that features as the cheapest in a nationwide tariff comparison table. Such comparison tables are based on national averages, and not all energy suppliers will offer the same cheap tariff to all regions in the UK. Additionally, factors such as household energy consumption and payment methods will have a big impact on how much individual consumers pay for their gas and electricity. The best way of paying is almost always by Direct Debit. Direct Debit customers will often get discounts and they will also usually have a much easier time keeping on top of payments. Finally, while independent suppliers are great for finding cheap tariffs, consumers should be aware that the tariffs are usually limited to short- and medium-term fixed deals. Most independent suppliers limit their fixed-rate periods to two years, meaning that if customers want to fix into a certain tariff for longer than that period they will likely have to opt for one of the Big Six suppliers.
With electricity and gas prices yet again on the rise, many customers are finally starting to look beyond the Big Six energy companies and towards some of the smaller competitors. Independent suppliers often have the flexibility to offer some of the cheapest tariffs currently on the market. To find a cheap energy supplier, customers are often better off going with a small company. By doing so, these customers will enjoy the same gas and electricity as before, but at lower rates.
This article is copyright free.