During the pandemic time, it is essential that you cautiously spend your money. Millions of people are set to work from home, and energy bills will likely soar in the coming months.
Many of you are already on a pay cut, and an increasing number of energy bills is another turn of the screw. This has caused many people to shun contribution to emergency cushion and pension savings, but if you are also making this mistake, you should stop it.
Despite being in a tight spot, you should not stop setting aside money for a rainy day. Now is the time to sit down and take notice of all of your expenses to figure out where you can whittle down.
You can think of switching to a cheaper energy deal, but there are a lot of factors you should consider. This blog discusses some of the pitfalls you can fall prey to.
Look beyond the superficial cost.
You may be tempted to choose a deal that seems to be much affordable. Many people use comparing sites to get the cheapest deal, but unfortunately, they cannot show up every single deal.
This is because some vendors do not disclose tariff information to the third party. It means there can be a cheaper deal than what are showing up in the comparing sites and you can miss out on them. You can find your bill, including hidden cost.
Make sure that the supplier has provided a bifurcation of cost, so you know both electricity price and non-commodity charges. Be wary of suppliers that offer you cash back at the end of the year because switching to another supplier within the year will lead to its loss.
Dual-fuel deals are not always cheap.
If you are getting gas and power from the same supplier, the vendor will likely put you on a cheaper deal. It not only helps you get the deal at lower prices but also enables you to manage your account smoothly.
However, choosing a dual-fuel deal is not always a cheaper option. Dual-service discount rates have fallen recently in that the supplier could save money on their operation costs.
Further, the research has found that separate suppliers cost annually £1,206 on average for both power and gas, while dual-fuel deals cost annually £1,290 on average.
You will likely pay double due to service glitches.
At the time of switching your power supplier, you will have to send the final metre readings so that you can start paying to your new supplier. However, many people have ended up paying both the suppliers, and when the previous supplier was asked to issue the final bill, they reported that there was a technical glitch.
Although not so many complaints have been raised about it, it is always better that you do some research beforehand. With online tools, you know the best suppliers based on customer service so that you can implement the switch as soon as possible.
You are switching after the fixed deal ends.
As your fixed deal expires, the supplier will immediately put you on a standard rate, and it will likely be three times more than your current bill. Therefore, you should try to switch your supplier before the fixed deal expires.
However, some suppliers put you on a new fixed deal that costs hefty exit fees without keeping you in a loop. This is why you should ask your supplier about everything, including exit fees and all. Make sure that your supplier provides you with an opt-out facility for another deal.
Switching energy deals can help you save some money provided you are careful about these pitfalls. Energy bills are soaring rapidly, and this year work from home is one of the reasons. Although you can fund the gap with small instalment loans for bad credit, you should opt for a cheaper deal.
However, there are still some circumstances when you feel like running out of money to make ends meet. In this challenging situation, you can think of taking out loans for bad credit with no guarantor to pay your energy bills.