When you are a regular user of Money Dashboard it becomes really clear where you are overspending. Many of our users don't realise how much of their income goes towards gas and electricity bills until they're able to visualise it with our budgeting software.
If you think you might be paying too much but don't know where to start, this article aims to give you the knowledge you need to do some informed comparison shopping.
Some users find it difficult to shop for an energy supplier due to the baffling lingo. The following are some of the more common industry terms and their meanings:Tariff The type of account or payment arrangement for energy usage agreed upon between the energy company and their customers. Different tariffs are appropriate for different energy usage behaviour.Kilowatt Hour (kWh) A unit of energy, an appliance that requires 1000 watts of power uses 1 kWh of energy every hour. Your energy usage is measured in kilowatt hours.Standing Charge An amount you pay regularly, often daily, for your power regardless of how much you use.Unit Rate The amount you pay per unit of energy you use.Tiered Rates A feature of some energy tariffs where you pay different rates after certain thresholds of energy usage. Usually the first tier is more expensive, and after a certain level is reached the unit rate is reduced.Variable Tariffs The unit rate and standing charge of your tariff can be increased or decreased by the energy company, usually they will send a letter alerting you to rate changes.Fixed (or Fixed Price) Tariffs The unit rate and standing charge of your account cannot be changed without your consent. These tariffs will likely be more expensive or have other restrictions like fixed contract length.Capped Tariffs The tariff is variable, but will not rise above a specified cap or limit.Dual Fuel - When your gas and electricity comes from the same supplier. This is almost always cheaper than the alternative.Exit Fee A one-off fee for changing your energy tariff before a period of time agreed with the energy supplier is reached.Off-peak Tariffs Rates for energy usage are different during specified hours of the day. This is useful if you use more electricity at night, or if your home uses a storage heater.
Before you begin, make sure you have all the following information
- Your full address and postcode
- The name of your current gas and electric supplier
- Your current tariff
- How much you spend on power in a month, and in a year
- How many kWh of electricity you use in a month, and in a year
- Your bank account or credit card details