How to automatically switch to the best energy tariffs
It’s well documented that people are more likely to get divorced than change bank accounts. The same goes for energy providers—between 2012 and 2017 one in three households stuck with the same supplier losing an estimated £1,500. Here’s how to switch and save with zero effort…
Can lethargy pay?
Since 2016, things have started to get easier. There are some new kids on the block. And they are called “switchers”. In simple terms, these companies do all the legwork—they find the best deals and they switch providers on your behalf—whilst you reap the benefits. And these benefits are ongoing.
All of these companies will only switch customers’ accounts if they find a cheaper tariff. You will be notified by email, but do not have to take any further action. The main “switchers” are Flipper, Labrador and Look After My Bills.
How do they differ?
The main differences are as follows:
• Flipper asks its customers to give them access to their bills, and it switches suppliers based on this information. Of course, these bills might be estimated, so they could be misleading. It makes its money by charging an annual fee of £25. Flipper compares deals from all firms that offer an online tariff. Flipper will continually search for the best deal, even if you are currently on a fixed rate (if the saving outweighs the exit fee). But it will not switch you unless it can save you at least £50 a year.
• Look After My Bills (LAMB) doesn’t charge a fee but makes money from the commission it receives from the providers. It will only switch you once your fixed deal has expired. It’s unclear as to how they get information from their customers (and I’ve read the small print). Perhaps I’ll find out if I sign up?
• Labrador’s service “talks” wirelessly to their customer’s smart meter. As such, the switching data should be super accurate. An Internet connection is required. It makes money from the commission it receives from the providers. Labrador claims that the suppliers it uses account for 80 per cent of the market. Like Flipper, Labrador will continually search for the best deal. But Labrador will not switch you unless it can save you at least £80.
As Labrador’s CEO, Jane Lucy, explained to Reader’s Digest, “Not only is the energy market complicated and boring, it also lacks transparency. At Labrador we are passionate about returning power to the customer in a way that’s easy and accessible. Sign up can be as quick as 90 seconds to enable us to ensure you remain on a cheap deal, personalised to you, forever.”
What’s the catch?
To date, a little over 12 million smart meters have been installed. But, according to the National Audit Office (NAO), the first generation of smart meters do not always continue working if a customer switches supplier. They instead, according to the NAO, “go dumb”.
The data suggests that affects 70 per cent of these smart meters. It doesn’t affect second-generation meters, but only about 110,000 of these have been installed at time of writing. Whenever I read about such incompetence, I question whether it is actually that. Or, perhaps, it’s another ruse to make switching less straightforward.
Labrador have found several ways around this. They can work out whether you own a first- or second-generation meter. Additionally, they can ensure they only switch you to a new provider that can support your first-generation meter. Better still, if you don’t have a smart meter, they will provide one. They also offer a service for everyone—smart, traditional, economy and prepayment.
How do I sign up?
Typically this takes less than five minutes. Each switcher has a few mandatories—such as having access to the Internet, being paperless, providing your bank details and paying by direct debit—but these do vary.
Should you sign up?
If you are one of the lucky households who has a second-generation smart meter, definitely; if not, probably. As the technology improves, these kinds of services are likely to get better. And most households stand to save £300 a year.