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Be an energy shopper

Be an energy shopper

Want to cut hundreds of pounds from your yearly household costs? It's called energy shopping, and anyone — including renters — can do it.

"Energy shopping" is a term originally coined by Ofgem to describe running an energy comparison. It simply means using an accredited price comparison site to find the best energy plan on the market.

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Energy shopping – what is it?

As the energy regulator, Ofgem is tasked with making the energy market as fair and competitive as possible so households don't pay too much for their energy.

Ofgem rolled out their 'Go Energy Shopping' campaign in 2014 to encourage more supplier switching in the UK's energy market (Citizens Advice has since taken over the campaign).

It is Ofgem's belief that one of the reasons more people don't switch is because it's too difficult. That's why the retail market review or 'RMR' was introduced in 2010 in addition to the "Be an energy shopper" campaign.

What is the RMR?

The RMR was designed to clean up the energy market and has three main components: making energy simpler, clearer and fairer.

The 'simpler' bit refers predominantly to simplifying tariffs. First of all it ensures that each energy supplier offers only four core tariffs. This is to counteract the confusing array of tariffs that often lead to people with the same supplier paying vastly different amounts.

What's more, those tariffs must also all have a clear pricing structure. That means 'tiered' tariffs — whereby you pay a different rate depending on how much you use — have been done away with. That should help ensure you know exactly how much you're paying and therefore make it easier to compare when it comes to switching.

The second core component of the RMR, 'clearer', is about how energy suppliers communicate with you, the customer. That means your bills will now come with a tariff information label making it easier to compare, a personal projection of how much you'll pay over the next year and a personalised saving message.

Your energy supplier is now also required to tell you when you're not on their cheapest tariff.

Finally the 'fairer' bit refers to how Ofgem enforces the rules that energy suppliers abide by. That means doing away with things like automatic rollovers onto their most expensive plans, ensuring you're notified in advance of price changes, and making sure that people on 'dead tariffs' (namely tariffs not available to new customers) are switched.

Why are these changes required?

The 'energy shopping' campaign is all about making it easier for you to change energy suppliers, the same way you change supermarkets, car insurance suppliers and banks when you're not happy with the service you're getting.

Historically though, the complex nature of energy tariffs and the information provided on bills from suppliers has made it more difficult than it should be.

For instance, it used to be that some tiered tariffs would charge you at three different rates – a standing charge, a lower usage rate, and a higher usage rate charged when you use more than a certain amount. Comparing such a complex tariff with another that charged one rate – regardless of usage – was not easy.

That's where sites such as Uswitch come in – to help you compare the energy market — go "energy shopping" as it were — and find the best deal for you.

How does energy shopping work?

Energy shopping is simply shopping around for a better deal, just like you do when you run an energy comparison on the Uswitch site.

If you've never switched energy supplier or even changed plan type before, there's a good chance you're paying more than your need to for your energy.

Most energy suppliers will leave you on a standard tariff for as long as possible. After all, it's not in their interests to have you paying less. The new rules mean they will tell you if there's a cheaper plan available, but it’s important to realise this recommendation will only be their own plans.

To run an accurate energy comparison there's some basic information you'll need first, all of which you should be able to find on your latest gas and latest electricity bills.

To get the most accurate comparison you should use you energy consumption figures in kWh for the whole year. That way you can compare exactly how much you use – regardless of what plan you're on – to see which tariff would be cheapest for you.

Then you need your plan name, what supplier you're with, and how you pay your bills (by Direct Debit or on receipt of bill for instance), and we'll show you how much you could be paying.

Crucially, there are different sorts of plans available that might save you money in the long run. Fixed plans for instance work just like fixed mortgages by fixing your rate for a given period of time. If price rises are likely in future they might be the best deal, even though another plan could save you more now.

How do the changes make energy shopping easier?

The changes made under the RMR simplify the whole process making it easier to remember when to switch and providing you with all the information you need upfront.

The new tariff information label contains all the information you will need when you run an energy comparison. It lists:

  • the supplier name, so you know who supplies your energy
  • the tariff name, so you can tell us exactly what plan you're on
  • the tariff type, including whether it's fixed or green, for example
  • the payment type, so you know if you pay by standing order, monthly Direct Debit or on receipt of bill
  • your unit rate, which is how much you pay per kWh used
  • how long your price is guaranteed for, again only if this is relevant
  • whether you plan has a termination/exit fee
  • any discounts or additional charges
  • any other products included with your tariff

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