Power bills are going up and many households are bracing for electricity price increases of 20 per cent or more, putting thousands of people into energy poverty.
This has prompted some energy retailers to start offering discounts of up to 40 per cent off your next bill. How can you go wrong?
Unfortunately, these big, headline-grabbing discounts are not always as good as they appear.
With more than 20 electricity retailers operating in some areas, discounts have become a marketing tool – designed to catch your attention and ultimately get you to sign up.
Some retailers just market themselves based on their customer service credentials, or try even harder to sound like your best mate.
Others, however, simply go with the big numbers. The way things are going, we’ll soon see an energy plan claiming a 50 per cent discount.
Conversely, some energy retailers now market themselves based on the fact that they don’t deal with discounts.
The truth is, however, that you should be equally wary of these retailers as the ones promising the big discounts.
So, why is the 0 per cent plan cheaper than the 43 per cent one?
It’s quite simple really – the retailer without the discount has low rates, while the retailer with the big discount has very high rates.
In the case of the 43 per cent discount plan, you’re simply getting a huge discount off an otherwise eye-watering energy bill.
However, don’t make the mistake of assuming that all electricity plans with big discounts are to be avoided – far from it. In some cases – and in some areas – they can prove the cheapest deals on the market. Ready to give up? No one would blame you.
But we all need to power our homes and want to get a good deal, so what can you do about it?
Ultimately, the key to getting a true picture of power costs is to become familiar with retailer energy price fact sheets.
Away from all the promotions and marketing, these documents hold the secrets to your energy provider’s plan and rates.
All the information you need to make an informed decision is right there in front of you. Interrupting this information isn’t always easy, but once you’ve reviewed a couple of different price fact sheets, you will quickly realise they’re not as daunting as they appear.
If all energy products were simply made up of supply and usage charges, finding the cheapest deals would be pretty easy – you’d simply look for the lowest rates and make sure you’re not going to be charged any surprise fees.
But energy discounts aren’t going away and do bring a level of confusion to your power comparison. Unless you’re a maths professor, making sense of different rates – with different discounts applied to different parts of your bill – is next to impossible.
Like them or not, comparison websites do help cut through the confusion and offer a guide as to which plans are actually worthy of consideration and which are just ripping you off.
However you decide to go about finding a better energy deal, the key word is ‘education’.
Look at fact sheets, look at customer reviews, and regularly compare offers on the market. Do that and you stand a good chance of bagging one of the best deals – big discount or not.