A switch in time saves a lot of cash

Changing your utility providers is a relatively simple process in most cases, and it can net you a few quid too. Graham Clifford.

Traditionally, we Irish are a conservative lot. We don't like too much change, and feel somewhat suspicious of the unfamiliar. 

Slowly but surely, though, a shift is taking place in Irish society when it comes to the consumer. It's estimated that about 15 per cent of the energy market in Ireland switches each year for a better deal. And since deregulation in the energy supply market, many of us are now looking around for the best deals to suit us and then switching from one provider to another. 

The recent announcement by Electric Ireland that it is to reduce its standard electricity price by a substantial 6 per cent has caused many to sit up and take notice, asking whether they should be switching their utility providers, banks, TV, broadband and/ or mobile phone network. 

Electric Ireland's price reduction takes effect from June 1, and it's anticipated that the average customer with the company will see electricity bill reductions of around €57.75 a year. 

A spokesman for Electric Ireland said: " This is the third reduction over the past 19 months. Electric Ireland is pleased to be in a position to reduce prices... as we are very aware of the difficulties many customers are experiencing on an ongoing basis. Initial analysis of call centre trends shows a significant increase in interest from prospective customers." 

Will competitors follow suit? 

"Energy suppliers can afford to drop prices because they are paying less for the gas and electricity that they buy," said Simon Moynihan. communications director with the Irish comparison and switching website Bonkers.ie. 

"Electric Ireland also reduced unit prices in November 2015 by 3 per cent, so its total reduction in the last year has been around 9 per cent," Moynihan said. "It can do this because the cost of a wholesale unit of electricity has fallen by over 35 per cent in the last 12 months. 

Electric Ireland's price cut will likely put pressure on other suppliers to cut prices, according to Moynihan, but he said that " the real savings are there for customers that engage with the market". 

"Switching from standard rates right now will save customers more than € 200 over the next 12 months. Waiting for a price cut from your supplier could yield around € 58 if you're an Electric Ireland customer, and you may not see any reduction if you are with another supplier. So you could be nearly four times better off switching to a discount than waiting for a price cut," he said. 

Consumers should ask themselves if they're doing everything they can to get the best deal on the market.

The first question you should ask yourself is when was the last time you switched? If you have never switched energy supplier before, you are most likely on your supplier's standard tariff, which is typically the most expensive in the market. As of today there is a €376 difference between standard tariffs and the cheapest gas and electric deals on the market. 

New customer offers usually include a 12- month introductory discount. When your discount ends you will be automatically moved onto a more expensive tariff. This is the time to switch again to a cheaper deal. Make a note of when your energy contract ends. If you switch when you're still in contract, you may be liable to pay an early exit fee to your current supplier for breaking your contract ahead of time.

How difficult is it to switch? 

The switching process has simplified in recent years. 

Often, what prevents households from switching is not having information to hand. To switch, you'll need your MPRN and GPRN, which are both listed on your energy bills; your latest gas and electricity meter readings; and your bank details, if you're paying by direct debit. 

The largest discounts in the Irish energy market today are given to those who choose to pay by direct debit and sign up to online billing. In addition to discounts, energy providers are offering a range of incentives to win new business. including cash - back bonuses, free boiler insurance and loyalty points. 

Bord Gais Energy (BGE) is among those striving to attract new business and attempting to retain existing customers. 

According to figures provided by BGE, it has won 26 per cent of the available electricity switching market in the past year, and 30 per cent of the available gas switching market. 

New customers who decide to switch to BGE for both their electricity and gas needs will receive discounts of 14 per cent off their electricity, 8 per cent off gas, plus €100 back off their electricity bill, whenever they choose to apply it. Bord Gais customers can also choose to pay their bills using Tesco Clubcard points.

All companies across the energy market are getting in on the act to attract switchers. The cheapest electricity deals in the Irish market at the moment is Energia's SaveMe260 electricity tariff, and the cheapest gas tariff is Flogas's 20 per cent Direct Debit Discount tariff. 

Energia told The Sunday Business Post that, according to "the Commission for Energy Regulation's own figures, Energia has consistently been one of the most popular energy companies for Irish households switching electricity and gas provider". 

In other utility sectors, too, Irish consumers are becoming more pro- active in seeking out alternative and better value contracts. But are some deals more attractive on paper than they are in reality? 

Major telecommunication companies are now offering bundles to customers, but these aren't always the best choice, it seems. 

"Bundling represents very good value - if you want all of the services that come in the bundle. And that's the difficulty. Many people don't," said Moynihan. 

"Bundles also offer the most enticing sign-up incentives and discounts. Currently, Vodafone and Eir are offering six months' discounts, and one of Eir's TV broadband and phone packages offers a six-month introduction for €25 which goes up to € 77. Basic Sky TV will cost you €29.50 a month, and the cheapest unlimited broadband and phone deal is €45 from Pure Telecom, so you can buy comparable service for a similar price by separating your services." 

But Moynihan said that, often, people signed up to services they didn't require. " We hear again and again that people don't need landlines, but in some cases take them because most suppliers don't do a TV- and- broadband- only bundle," he said. 

"The trend now is definitely for unlimited fast broadband - on its own. And the majority of our customers apply for broadband- only products; but where they have to take a landline in order to get superfast broadband, as with Virgin Media for example, they will do so." 

The Commission for Communications Regulations ( ComReg) points out that, before switching, you should contact your provider or consult your terms and conditions to check on your minimum contract period, whether you are required to provide notice of cancellation, and if any early penalties apply for ending your current contract.

 An ICT consumer survey for ComReg, carried out by Red C last year, found that 39 per cent of Irish consumers who purchased bundled services last year switched providers in order to avail of the service and that one in ten bundle owners intend to switch in the future. 

Meanwhile, 37 per cent had previously switched their landline supplier. In terms of mobile phone contracts, 73 per cent of customers were with the same mobile phone service for longer than three years - with only 10 per cent indicating they intended switching.

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