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from the News of the World
Sheep tricks
Don't let British Gas cut fool you into switching
</IMG>
By Martin Lewis, Britain's Money Saving Expert, 25/01/2009
FREEZE! Don’t move a muscle. British Gas may be trumpeting its new plan to knock 10 per cent off gas bills in order to tempt you in, but let me shout loud: DON’T SWITCH!
To explain, I’ll unveil my renowned impression of a gas and electricity company: “Baaaaaaa!” They’re like sheep; when one moves, the others follow. So compare and switch now, and you could ditch a company who’ll cut prices to become the new cheapest within weeks.
THE TRUTH BEHIND THE PRICE CUT
Here are the stats. Although announced on Thursday, rates won’t actually change until Feb 19. Strange, isn’t it? Last August, British Gas put prices UP with immediate effect, yet when they go DOWN, it clings on to every extra day’s profits.
Its standard and dual-fuel gas prices will fall by 10%, and online gas price by roughly the same. Those on monthly direct debits will have their payment automatically cut by this amount.
Yet for pre-pay and capped customers, there’s NO change and the fall only applies to GAS bills, not electric.
Let’s put this in context. Last year we saw two mammoth price rises, including a monster 35% in July. So while the average British Gas dual-fuel energy customer paid £930 in January 2008, even after this cut they’re still paying more than £300 higher than that.
Blame
Yet we’ve seen TUMBLING wholesale gas prices,(those that the energy companies pay). These have slipped by nearly 50% since last summer thanks largely to oil prices nosediving from $175 to $40.
Frankly, it’s WOEFUL. On Tuesday morning, I was on GMTV predicting price cut announcements within ten days and, based on wholesale prices, hoping for 20% off gas and 0% off electricity. Yet they’ve not come close.
But don’t blame British Gas: Its job isn’t to keep us warm, it’s to make money for shareholders.
It’s our politicians and regulators who must force it to bring us cheap prices.
WILL OTHER COMPANIES CUT?
The herd mentality rule usually works yet there are no guarantees. The worry here is British Gas’s price cut is so paltry that—while its online tariff’s cheap, even its reduced standard tariff won’t be much cheaper than other companies—so rivals may not feel the need to drop.
Yet my best guess is others will cut too. So hold on at least a few weeks, to check whether you’ll be able to get a much cheaper long-term deal.
Plus the minutiae of British Gas’s new tariff isn't yet public, the price comparison companies don’t have details, so there’s a practical problem of discovering who’s your cheapest.
This ISN’T a call to do nothing, though. It’s about sitting on your hands for a few weeks, then comparing to switch. You can get a free “time-to-switch” email reminder from www.moneysavingexpert.com/energy to show when the timing’s right.
YOU CAN STILL SAVE
Even without switching, there’s PLENTY you can do to curb your fuel costs:
Switch to your supplier’s internet tariff. If you’re prepared to receive bills by email or online, big savings await. Most companies knock up to 10% off online tariffs—that’s £150 a year for many people.
Pay by monthly Direct Debit. The majority of companies charge around 10% less than paying by quarterly bills, cheque or card.
Always give meter readings; NEVER rely on estimates. If you pay by monthly Direct Debit, ensure your bills are accurate. If your Direct Debit is set too high go to www.moneysavingexpert.com/energydebits for a full guide on how to fight it.
Reduce power use. Switch off lights, never leave hot water taps running and scrutinize your EVERY move at home. It ALL costs.
On a prepay meter? Don’t accept second-best. Historically these tariffs, which supposedly help people budget, have been most expensive. Government pressure has changed that a little but if you’re overpaying, compare at Energyhelpline (0800 074 0745) and Uswitch (0800 404 7961). If you are struggling financially, your provider may offer special low-income “social” tariffs with benefits like free insulation or lower prices. Yet don’t automatically assume it’s cheapest— providers’ online tariffs often triumph.
Did you cap when I yelled CAP!? Until July last year I warned Cap Now to anyone worried they couldn’t afford price hikes as it seemed almost certain rises were on the way.
Capping means you pay a little more to lock-in to a tariff frozen for a set time. If you grabbed one, you beat the MASSIVE 30%-plus rate-hike nasties and should already have saved serious bucks.
Even now, with prices heading south, at worst it’s likely most people on those caps will be paying roughly the same as the “price-cut” tariffs— and they have security their price won’t rise.
If you bagged a cap more recently, though, you could find you’ve locked in at higher prices.
So once we’ve a level playing field, do a comparison and see if the savings you can make outgun any penalty for ditching that cap and the value of having a long-term secure tariff.
Bank charges update
REMEMBER I promised you an update on the reclaiming bank charges saga? Here’s the latest news . . . NOTHING’S HAPPENING.
Well, not for another six months at least.
This week the Financial Services Authority “waiver” on unfair bank charges, the rule that means NO reclaims will be considered before then, was meant to end. Yet it has been extended for another six months.
In my view, this is simply UNACCEPTABLE. That makes it 18 MONTHS in the deep-freeze.
And people are STILL sat on their hands unable to reclaim. It means the banks’ delaying tactics have worked.
How long must people wait? Payouts could help put money back in the economy and, with the financial slowdown, this hold adds to the woes.
There is one bright spot, though. Six months ago the FSA said reclaimers in financial hardship cases MUST be heard. And, with their arms twisted behind backs, the banks have started paying out. Success stories are flooding in.
Last month the record hardship reclaim payout was broken, with one victim receiving more than £10,000. Free reclaiming template letters are at www.moneysavingexpert.com/bankcharges
TV Money Guru Martin Lewis is the creator of the Consumer Revenge website www.MoneySavingExpert.com which is packed with info on how to get more money in your pocket.
Sheep tricks
Don't let British Gas cut fool you into switching
</IMG> By Martin Lewis, Britain's Money Saving Expert, 25/01/2009
FREEZE! Don’t move a muscle. British Gas may be trumpeting its new plan to knock 10 per cent off gas bills in order to tempt you in, but let me shout loud: DON’T SWITCH!
To explain, I’ll unveil my renowned impression of a gas and electricity company: “Baaaaaaa!” They’re like sheep; when one moves, the others follow. So compare and switch now, and you could ditch a company who’ll cut prices to become the new cheapest within weeks.
THE TRUTH BEHIND THE PRICE CUT
Here are the stats. Although announced on Thursday, rates won’t actually change until Feb 19. Strange, isn’t it? Last August, British Gas put prices UP with immediate effect, yet when they go DOWN, it clings on to every extra day’s profits.
Its standard and dual-fuel gas prices will fall by 10%, and online gas price by roughly the same. Those on monthly direct debits will have their payment automatically cut by this amount.
Yet for pre-pay and capped customers, there’s NO change and the fall only applies to GAS bills, not electric.
Let’s put this in context. Last year we saw two mammoth price rises, including a monster 35% in July. So while the average British Gas dual-fuel energy customer paid £930 in January 2008, even after this cut they’re still paying more than £300 higher than that.
Blame
Yet we’ve seen TUMBLING wholesale gas prices,(those that the energy companies pay). These have slipped by nearly 50% since last summer thanks largely to oil prices nosediving from $175 to $40.
Frankly, it’s WOEFUL. On Tuesday morning, I was on GMTV predicting price cut announcements within ten days and, based on wholesale prices, hoping for 20% off gas and 0% off electricity. Yet they’ve not come close.
But don’t blame British Gas: Its job isn’t to keep us warm, it’s to make money for shareholders.
It’s our politicians and regulators who must force it to bring us cheap prices.
WILL OTHER COMPANIES CUT?
The herd mentality rule usually works yet there are no guarantees. The worry here is British Gas’s price cut is so paltry that—while its online tariff’s cheap, even its reduced standard tariff won’t be much cheaper than other companies—so rivals may not feel the need to drop.
Yet my best guess is others will cut too. So hold on at least a few weeks, to check whether you’ll be able to get a much cheaper long-term deal.
Plus the minutiae of British Gas’s new tariff isn't yet public, the price comparison companies don’t have details, so there’s a practical problem of discovering who’s your cheapest.
This ISN’T a call to do nothing, though. It’s about sitting on your hands for a few weeks, then comparing to switch. You can get a free “time-to-switch” email reminder from www.moneysavingexpert.com/energy to show when the timing’s right.
YOU CAN STILL SAVE
Even without switching, there’s PLENTY you can do to curb your fuel costs:
Switch to your supplier’s internet tariff. If you’re prepared to receive bills by email or online, big savings await. Most companies knock up to 10% off online tariffs—that’s £150 a year for many people.
Pay by monthly Direct Debit. The majority of companies charge around 10% less than paying by quarterly bills, cheque or card.
Always give meter readings; NEVER rely on estimates. If you pay by monthly Direct Debit, ensure your bills are accurate. If your Direct Debit is set too high go to www.moneysavingexpert.com/energydebits for a full guide on how to fight it.
Reduce power use. Switch off lights, never leave hot water taps running and scrutinize your EVERY move at home. It ALL costs.
On a prepay meter? Don’t accept second-best. Historically these tariffs, which supposedly help people budget, have been most expensive. Government pressure has changed that a little but if you’re overpaying, compare at Energyhelpline (0800 074 0745) and Uswitch (0800 404 7961). If you are struggling financially, your provider may offer special low-income “social” tariffs with benefits like free insulation or lower prices. Yet don’t automatically assume it’s cheapest— providers’ online tariffs often triumph.
Did you cap when I yelled CAP!? Until July last year I warned Cap Now to anyone worried they couldn’t afford price hikes as it seemed almost certain rises were on the way.
Capping means you pay a little more to lock-in to a tariff frozen for a set time. If you grabbed one, you beat the MASSIVE 30%-plus rate-hike nasties and should already have saved serious bucks.
Even now, with prices heading south, at worst it’s likely most people on those caps will be paying roughly the same as the “price-cut” tariffs— and they have security their price won’t rise.
If you bagged a cap more recently, though, you could find you’ve locked in at higher prices.
So once we’ve a level playing field, do a comparison and see if the savings you can make outgun any penalty for ditching that cap and the value of having a long-term secure tariff.
Bank charges update
REMEMBER I promised you an update on the reclaiming bank charges saga? Here’s the latest news . . . NOTHING’S HAPPENING.
Well, not for another six months at least.
This week the Financial Services Authority “waiver” on unfair bank charges, the rule that means NO reclaims will be considered before then, was meant to end. Yet it has been extended for another six months.
In my view, this is simply UNACCEPTABLE. That makes it 18 MONTHS in the deep-freeze.
And people are STILL sat on their hands unable to reclaim. It means the banks’ delaying tactics have worked.
How long must people wait? Payouts could help put money back in the economy and, with the financial slowdown, this hold adds to the woes.
There is one bright spot, though. Six months ago the FSA said reclaimers in financial hardship cases MUST be heard. And, with their arms twisted behind backs, the banks have started paying out. Success stories are flooding in.
Last month the record hardship reclaim payout was broken, with one victim receiving more than £10,000. Free reclaiming template letters are at www.moneysavingexpert.com/bankcharges
TV Money Guru Martin Lewis is the creator of the Consumer Revenge website www.MoneySavingExpert.com which is packed with info on how to get more money in your pocket.
