Most of us are feeling the squeeze: 96% of people in our latest CHOICE Consumer Pulse survey said their household bills and expenses have increased in the last 12 months.
Aside from making do with less, you can ease the pressure on your budget by making sure you're getting the best deal on your bills. If you've been with the same electricity provider for a while, chances are you're paying too much for your power.
If you've been with the same electricity provider for a while, chances are you're paying too much for your power
Switching to a better deal could save you hundreds of dollars a year, so it seems like a no-brainer – but navigating all the ins and outs of researching and making the switch can be daunting.
To take the pain out of the process, we'll bust some common myths that might be stopping you from exploring a new energy provider, and hopefully set you on the path to more cash in your pocket.
Myth 1: It won't save much money
You're probably wondering whether the effort of switching will be worth your while – who wants to do all that work for very little reward?
How does $350 a year in savings sound? Not bad, right?
Energy comparison and switching service Bill Hero says that, on average, their customers save $350 a year the first time they make a switch. Find about more about the CHOICE partnership with Bill Hero.
Of course, the amount you can potentially save depends on factors such as where you live, how much energy you use and when you use it, as well as the type of plan you have.
CHOICE tip: Price isn't the only factor to consider when choosing a supplier, but it's obviously a big one. Before you sign up to a new supplier, you should compare the conditions and benefits as well as the costs of your current plan against those of the plans you're considering, plus any potential connection or exit fees.
If you want to really save money on your electricity bill, it's worth looking into a solar panel system. The CHOICE solar estimator can show you how much a solar system might cost and what you might save.
Myth 2: I'm stuck with my current supplier
You're never 'locked in' to your energy supplier, although there are some situations where it might be tricky to switch. These include if you live in an apartment building or as part of a strata complex with an embedded network (which are typically locked in to a single energy supplier for a contracted period of several years).
Where you live in Australia will also affect how competitive or regulated the market is, and therefore the options you have to switch to a better deal.
The areas with the most competitive energy markets – therefore where you stand to make the biggest savings – are NSW, South East Queensland, South Australia, Tasmania and Victoria.
CHOICE tip: Some suppliers may charge you an exit fee or financial penalty when leaving, but this could be less than the potential savings you stand to make.
Myth 3: I like my provider; I should sit tight and be loyal to them
Energy retailers are all essentially selling you the same thing – a commodity that will be the same no matter who you get it from. But prices can still vary significantly between retailers. If cost is all that matters to you, there's no reason why you shouldn't chase a cheaper deal.
However, you may have chosen a particular retailer for other reasons that may be important to you, such as their eco credentials, or they have a good level of customer service or support that means you can always get your queries answered at any time of day using a method of communication that suits you (speaking to someone in person versus using a live chat bot, for example).
So if you're happy with your retailer but looking at how you can make savings, it's worth contacting them to see if they can offer you a cheaper deal or any further benefits, discounts or incentives. (Ask your energy provider these questions.)
CHOICE tip: You should still assess all your utility providers about once every year to ensure you're getting the best option.
Myth 4: Switching suppliers takes a long time
Worried it'll take forever to start seeing your electricity bill shrink? Don't panic: it'll happen much faster than you think, thanks to a rule introduced by the Australian Energy Market Commission (AEMC). You'll only have to wait a few days for the switch to happen.
Previously, the standard practice was that you had to wait for the next meter read, which could take up to 95 days depending on where you were at in your billing cycle.
Since the rule change, the switch process now takes two to three business days for the new retailer to process your order and issue you with a welcome pack, with a 10 business day mandatory cooling-off period and a two business day transfer period. Which means that consumers are in a much better position to switch to a new retailer and take advantage of a better deal.
Your electricity or gas supply won't be interrupted when you change contracts or move to a different retailer.
How to switch your energy provider
There are three ways you can switch your energy supplier, each with varying levels of 'hassle':
1. Research all your options and make the switch yourself
If you do your own research, be wary of commercial comparison sites that don't show all available deals on the market and instead often only show offers from suppliers they've partnered with or get commission from.
2. Use a free government comparison site to compare available offers and make the switch yourself
Free government non-commercial comparison sites such as Energy Made Easy or Victoria's Energy Compare lets you compare all the available energy prices and plans in your area, and then you manage the switching yourself.
3. Use a paid compare and switch service to facilitate the process for you
Bill Hero is a paid compare and switch service that can facilitate the switch for you and continue to monitor the market for better deals that suit you. CHOICE has partnered with Bill Hero as it meets our standards for a consumer-friendly switching service. It doesn't take commissions from retailers and it compares every publicly available deal.
For a subscription of $49 a year for either gas or electricity (or $79 for both gas and electricity), they'll automatically monitor every bill for you, and calculate what each bill would cost under every other plan in the market. If you want to switch, they facilitate the process for you.
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With no self-interest behind our advice, you don't just buy smarter, you get the answers that you need.
You know without hesitation what's safe for you and your family.
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Stock images: Getty, unless otherwise stated.
