Forewarned about possible energy price rises after April 1 by an article I read the other day, I thought I'd take a quick look for a cheaper energy deal.
The obvious places to look are the switching websites. I looked at four:
The first two are recommended by Ofgem. The second two aren't, but don't seem to me any worse than the other two, Uswitch it also has a useful but partially hidden feature whereby you can display the small cheap companies with which it apparently has no commission arrangement. The Which? site offers those by default
On each service I went through the normal rigmarole of adding my current usage and selecting my energy company and tariff. The fact that there were about twenty tariffs that sounded like my own led to my checking more carefully than I usually do before picking the one I believed was mine - it was the only one that could have been.
I was delighted to find one deal with a medium sized company that would save me £343 over a full year and another from a small company that would save £441. (It's worth noting that the best deal was not so good on the Which? site. They used higher rates for the cheaper company. Whether that's due to better accuracy or the absence of 'special' rates, I don't know).
To be sure, I checked the rates that had been used in the calculations for my current Ovo tariff. Despite my care in choosing the best option, I could see that both the unit charge rates and the standing charge ones were higher than the rates shown on my latest bill. So I tried a few more tariffs to try and get one closer to my own. All were just a bit higher than my actual current rates - but not by much. So even when I made a rough adjustment in my mind, the deals still seemed good.
But, wanting to get an accurate comparison, I went back to my last annual statement to get an exact record of my usage in kwh in 2018. I then plugged that into Excel along with the correct rates of my current deal with Ovo along with those for the 'cheaper' deals.
The results Excel gave me reduced the £343 saving to £3.40 and the £441 one to £109.57. That's quite a drastic difference (and one which probably explains why, when I used the same services with less care some years back, I found I was paying slightly more under my then-new-deal).
£109 is not to be sniffed at, but my fixed tariff with Ovo doesn't end till 31 August. That means any change before then would entail my paying a £60 exit fee. So I'd end up saving only £49 on the cheapest deal. Set alongside the Which? service rating for Ovo* vs that for the cheaper company, I'm not minded to change.
All the comparison sites returned similar sorts of miscalculation. Critically, none offer the option of correcting the unit rate used for your current supplier (not even the Which? site). The only option is to tick 'don't know' which exaggerates the saving even more by using your current supplier's much higher variable rate. Neither do any of the sites give any warning about the possible inaccuracy of the results and how to check them (not even the Which? one).
I'm left feeling very suspicious about what underlies the inaccuracies in the calculations returned by these sites. It's difficult not to wonder whether it's in the interests of the comparison sites to inflate the saving you'll make so as to maximise the possibility of you securing a deal through their site and so earning commission. At best, it's reckless carelessness which may end up costing people money.
Whatever reason underlies the inaccuracies, I for one will be a lot more cautious using them in the future. They're still useful as a first step, but I will always check more than one for the best rate with a particular company and will always check their results using my own calculations in future.
In the meantime I have dropped a note to all the sites I used and have asked for their comments. If I get any replies, I will publish then here.
As a final note and by way of owning my own fallibility, can anyone suggest anything I may have been doing wrong that led to the miscalculations? Or does anyone know of a comparison site that allows adjustment of your current rates?
(*Whatever the Which? rating says, my own experience of Ovo's customer service is that it has fallen quite sharply over the past few years - another thing that motivated me to look around)
If I've understood correctly, it sounds like the heart of the issue was that your current tariff wasn't listed on the comparison site and the inflated estimate of savings etc all stemmed from that (i.e. using the wrong tariff as a base line)? If so, I guess that doesn't suggest general or widespread inaccuracy, provided that you can actually choose the right tariff (of course, easier said than done, particularly if it isn't listed!).
In my experience, the greatest savings are to be found at the expiry of your fixed deal (which is probably competitively prices) when they try to bump you on to a more expensive 'standard tariff'.
I clearly didn't explain myself well enough.
I was led to believe that the tariff was listed. There were a number tariffs listed with the same name as mine. They were differentiated only by a date alongside them. The best match to mine had the same name as mine and a date 10 days prior to the start of my contract. The next showed a date three weeks after the start of my contract. It was a reasonable assumption to make that my contract would match the one with a date only 10 days prior.
If they don't list all the contracts, they should make that clear and offer the option of adjusting the rate figures used in their calculations. They should also give a very clear disclaimer about possible inaccuracies at the top of the results page.
Until I looked today, I'd never considered these services in much detail. I always took them at face value and assumed the savings they suggested were more or less accurate. I suspect many people use them in the same way.
I don't think the assumption I made was faulty, but my experience today showed that the sites can be very inaccurate and the services ought to make that clear.
As to getting the best savings at the end of your contract, I'm sure that's true when seeking a new contract from your current supplier. But, the expiry date of your current contract shouldn't make any difference when seeking out a contract from a new supplier.
Thanks Hugh. To be clear, it wasn't intended as a criticism of you - it doesn't sound like you could have done anything more. I was just trying to understand whether the source of the error was (a) that your specific tariff wasn't actually listed, or (b) that the tariff was listed but the calculation it did was mathematically incorrect. It sounds like it was (a), albeit that the unclear labelling of the tariffs meant that it was difficult or impossible for you to have realised this. Is that a fair summary?
On the expiry point, what I mean is that your fixed deal is probably already a competitive price, so you won't have much to gain from switching. When it expires the price with your current supplier will go up, so although the new supplier price won't be any different, the quoted savings from switching will be higher.
No problem. I hadn't taken it it as a criticism, more as a misunderstanding.
I think my tariff was listed but the rates given were wrong. It's difficult to imagine that the tariff would have changed additionally in the ten days before I started my contract or the three weeks after. So I've concluded that for whatever reason they got the rates wrong. It wouldn't be hard for them to offer a rate check and adjustment.
It sounds obvious but I'd never bothered to check before and I suspect most people are the same. So what is portrayed as a somewhat accurate tool is in fact pretty damn haphazard.
Fair enough. Personally I've never had any trouble with finding the correct tariff and getting an accurate read on the market, so I'm reluctant to damn them completely based on one example, but it sounds like something went wrong in your case, so it would be interesting to see what reply you get, if any. It would certainly be helpful if energy providers could find a way to give tariffs absolutely clear and unambiguous names, which might help to make things easier for consumers.
I’m not sure it’s down to energy suppliers. It’s the comparison sites wot need to change.
When you’ve used the sites and found your tariff, did you check the rates given for your tariff?
Any experiences from others?
If you haven’t tried an energy reverse auction I would recommend signing up for a no commitment illustration: https://bigcommunityswitch.ichoosr.com
" I checked the rates that had been used in the calculations for my current Ovo tariff. Despite my care in choosing the best option, I could see that both the unit charge rates and the standing charge ones were higher than the rates shown on my latest bill."
It might be that on your bill they show the rate not including VAT, which is 5%, while the energy comparison sites include it. I noticed this on MoneySavingExperts cheap energy club which is also a good comparison site.
Thanks, Jez. The VAT issue may play a part, but the difference in the calculated and actual figures is far in excess of anything that could be explained by that alone.
I originally thought the difference in the figures wasn’t that big and was surprised at the results of the final calculation. I guess that over 375 days and thousands of kWh littte differences add up.
© 2023 Created by Hugh. Powered by