Consumers are Switching Energy Suppliers in Droves
News on energy spending is convincing many consumers to switch plans. More than half of users in Europe get their energy from the Big Six, a conglomeration of energy suppliers that includes EDF, British Gas, npower, Scottish Power, SSE, and e.on.
If you aren't swapping out your provider every one to two years, you're probably paying more than you should. This is due to Standard Variable Tariffs. You're automatically added to this type of expense when your contract runs out with a specific company. It fluctuates with the market and is often more expensive than a fixed price plan.
Fixed-Rate vs Variable Rate
Energy tariffs differ depending on the energy provider you select. The main two options are a fixed-rate or variable rate.
Fixed-Rate
While your monthly bill amount can fluctuate, this policy sets a rate that can't change. The energy market has ups and downs. If you choose this method, you can't benefit when the variable price is low, but you won't spend more when it spikes.
Beyond that, it's predictable and easier to manage. You can plan out your monthly expenses and organize your income to cover energy costs.
Variable Rate
With this plan, prices per unit change depending on the wholesale value of energy. This is where many families suffer heavy losses. It's rare for the cost to drop long enough to create savings for users. The problem is that most don't know that their plan is set to a variable rate after a fixed contract expires.
Who's Making the Switch?
Around 40% of Europeans change their energy provider on a yearly basis. This means 60% of the population is covering the costs of market fluctuation. It's no coincidence that a similar percentage use a provider from The Big Six.
However, the word is getting around. More individuals are now swapping their energy company than ever before. It's just happenstance, of course, that these users were paying a variable rate. Either way, it's important to note that most users calculate savings on energy spend before making a choice.
Changing Your Plan
Considering all the variables that go into energy expenses, it's easy to tell that a fixed rate can save you a large sum of money. The costs can fluctuate depending on your electrical and gas usage. However, when that's the only factor that you need to consider, setting aside cash for your bills is a more approachable event.
You can do some research and contact a few providers to see what kind of rate works for you. It's highly recommended to switch to a fixed rate, but you should consider your circumstances before doing so.