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Domestic Energy Renewal Catch

Switching energy providers should save you £££’s. In fact, only last week, on ‘Rip-Off Britain‘, they claimed that if we all switched, then UK homes could save around £3bn!!! That’s quite a saving and yet many people still don’t do this. This same also applies to businesses.

Although we could save by switching, there is one slight catch. Typical I hear you cry!

Domestically, if you are in a 1 year fixed contract, you will receive your renewal letter (informing you that your tariff is coming to an end) approximately 4 weeks before the end date (renewal date). The 4 weeks prior, notice letter, is in effect your ‘Termination’ notice and is standard (or should be).

Now you have 3 possible options:

Do Nothing – which means that you’ll automatically roll onto the quoted rates in your renewal letter, which will be higher than any fixed rates. They will also be subject to market changes (up & down). Stay with your current supplier and arrange a better deal than the one they initial quoted (probably a fixed term/price tariff). Compare & switch using a comparison site (or do it all yourself).

As this article is entitled ‘Renewal Catch’, I’ll focus on point 3.

So you receive your renewal letter 4 weeks before the end date. You hit that computer for a comparison site, find a good deal and proceed to switch. Excellent…well, not quite.

You see, you now assume that come the end date, your new rates will automatically take effect then. In the UK, it takes between 4-6 weeks for the authorities to switch over from one supplier to another. You’ve probably seen the problem. There could be 2 weeks whereby, well…what happens? What rates do I pay?

The truth is, that if you switch right away, it may take 6 weeks for it to go through, in which time for those extra 2 weeks, you would have been paying ‘out of contract standard rates’ which are higher than fixed and subject to market changes.

So what should you do? As it takes an age to switch in the UK domestic market, I suggest that you keep track of your end date, by placing a reminder in your diary, computer calendar, mobile…etc, for somewhere in the region of 6-8 weeks prior to your end date. This way, you shouldn’t get caught in this corridor of uncertainty and end up paying those unforseen higher rates.

To compare your rates, use our comparison site (Tip: do find out your annual consumption and use this figure, not monthly spend)

For your free business energy quote & switch, contact U-GET Consultancy Services

15th Feb 2012

 


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